January 23, 2017 / 2:46 PM / in 9 months

CANADA FX DEBT-C$ dips amid NAFTA uncertainty, lower oil prices

* Canadian dollar at C$1.3321, or 75.07 U.S. cents
    * Bond prices higher across the yield curve

    TORONTO, Jan 23 (Reuters) - The Canadian dollar edged lower
against its broadly weaker U.S. counterpart on Monday, pressured
by an uncertain outlook for NAFTA, lower oil prices and
weaker-than-expected domestic data.    
    U.S. President Donald Trump could sign an executive order as
early as Monday intended to renegotiate the North American Free
Trade Agreement between the United States, Canada and Mexico,
NBC News reported. 
    The Bank of Canada warned last week there would be "material
consequences" if Trump enacts protectionist policies and left
the door open to an interest rate cut.    
    Canada sends more than 75 percent of its exports to the
United States.
    Prices of oil, one of Canada's major exports, fell as signs
of a strong recovery in U.S. drilling activity outweighed news
that Organization of the Petroleum Exporting Countries and
non-OPEC producers were on track to meet output reduction goals
set in December. 
    U.S. crude prices were down 1.77 percent at $52.28 a
barrel.
    The pace of Canadian wholesale trade cooled more than
expected in November amid declines in the motor vehicle and
parts sector, data from Statistics Canada showed. 
    The 0.2 percent gain missed economists' forecasts for an
increase of 0.5 percent, while volumes were down 0.1 percent.
The soft figures came after strong October growth, which was
revised up to 1.3 percent from the previously reported 1.1
percent. 
    At 9:24 a.m. ET (1424 GMT), the Canadian dollar was
trading at C$1.3321 to the greenback, or 75.07 U.S. cents,
slightly weaker than Friday's close of C$1.3315, or 75.10 U.S.
cents.
    The currency's strongest level of the session was C$1.3268,
while its weakest was C$1.3333. On Friday, the loonie touched
its weakest in more than two weeks at C$1.3388.
    Losses for the loonie came even as the U.S. dollar 
fell to a 1-1/2 month low against an index of the world's other
top currencies.        
    Still, speculators have trimmed bearish bets on the Canadian
dollar, data from the Commodity Futures Trading Commission and
Reuters calculations showed on Friday. Net short Canadian dollar
positions fell to 5,456 contracts as of Jan. 17 from 7,935 a
week earlier. 
    Canadian government bond prices were higher across the yield
curve, with the two-year up 2 Canadian cents to yield
0.763 percent and the 10-year rising 17 Canadian
cents to yield 1.730 percent.
    The 10-year yield fell 1.7 basis points further below its
U.S. equivalent to a spread of -73.4 basis points, as Canadian
government bonds outperformed.

 (Reporting by Fergal Smith; Editing by Lisa Von Ahn)

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