November 3, 2016 / 9:27 PM / in a year

CANADA FX DEBT-C$ edges higher as greenback selling offsets lower oil

(Adds analyst quotes, details on Bank of Canada governor and 
yield curve, updates prices)
    * Canadian dollar ends at C$1.3383, or 74.72 U.S. cents
    * Bond prices lower across the yield curve

    By Fergal Smith
    TORONTO, Nov 3 (Reuters) - The Canadian dollar strengthened
against its U.S. counterpart on Thursday as investor selling of
the greenback on U.S. election uncertainty offset lower oil
prices, but gains for the loonie were restrained ahead of key
domestic data on Friday.
    The U.S. dollar fell to a three-week low against a
basket of major currencies.
    "Investors in the United States are feeling the Donald Trump
jitters, without a question of doubt. And I think it manifests
itself in money going into (Japanese) yen and swissy (Swiss
francs) and even a little bit into CAD (Canadian dollar)," said
Adam Button, currency analyst at ForexLive.
    "However, the risks for Canada are also huge," Button added.
    Republican presidential candidate Donald Trump has said he
would renegotiate or scrap the North American Free Trade
Agreement if elected, posing a risk to the Canadian economy.
    U.S. crude oil futures settled 68 cents lower at
$44.66 a barrel as investors reeled from a record weekly surge
in U.S. crude inventories. Oil is one Canada's major exports.
       
    Canada's employment and trade reports are due on Friday and
will be watched closely by investors for clues on the interest
rate outlook after the Bank of Canada acknowledged recently it
had considered a rate cut at its policy meeting.
    The labor market is expected to have shed 10,000 jobs in
October after a hefty gain the month before, while the September
trade deficit is expected to narrow to C$1.7 billion. 
    The Canadian dollar ended at C$1.3383 to the
greenback, or 74.72 U.S. cents, slightly stronger than
Wednesday's close of C$1.3395, or 74.65 U.S. cents.
    The currency's strongest level of the session was C$1.3362,
while its weakest was C$1.3402.    
    On Friday, it touched its weakest level in seven months at
C$1.3434.
    Bank of Canada Governor Stephen Poloz will give remarks on
Thursday evening after being inducted to the Oshawa Walk of
Fame.
    Canadian government bond prices were lower across the yield
curve, with the two-year price down 0.5 of a Canadian
cent to yield 0.548 percent and the benchmark 10-year
 falling 12 Canadian cents to yield 1.198 percent.
    The curve steepened as the spread between the 2-year and
10-year yields widened by 1 basis point to 65 basis points,
indicating underperformance for longer-dated bonds. The spread
touched on Friday its widest in four months at 66 basis points.

 (Reporting by Fergal Smith; Editing by Bernadette Baum and
James Dalgleish)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below