February 13, 2017 / 2:36 PM / in 8 months

CANADA FX DEBT-C$ dips with oil prices ahead of Trudeau meeting with Trump

    * Canadian dollar at C$1.3101, or 76.33 U.S. cents
    * Bond prices lower across the yield curve

    TORONTO, Feb 13 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Monday as oil prices fell, ahead
of a meeting between Canadian Prime Minister Justin Trudeau and
U.S. President Donald Trump.
    Trudeau will look to nurture economic ties and avoid
tensions over issues such as immigration on which the two
leaders are sharply at odds.             
    Canada may have most to lose if a proposed renegotiation of
the North American Free Trade Agreement weakens trade between
the two countries.
    Spending by Americans affects one-fifth of Canada's economy,
while spending by Canadians affects less than three percent of
U.S. gross domestic product, said BMO Capital Markets in a
research note.
    The U.S. dollar        rose against a basket of major
currencies as investors focused again on the U.S. reflation
trade and braced for testimony by Federal Reserve chief Janet
Yellen this week.             
    U.S. crude        prices were down 1.39 percent at $53.11 a
barrel in response to growing evidence that U.S. production is
rising.             
    Oil is one of Canada's major exports.
    At 9:22 a.m. ET (1422 GMT), the Canadian dollar          was
trading at C$1.3101 to the greenback, or 76.33 U.S. cents,
slightly weaker than Friday's close of C$1.3085, or 76.42 U.S.
    The currency's strongest level of the session was C$1.3073,
while its weakest was C$1.3121.
    The loonie weakened 0.4 percent last week after having
posted a recent four-month high of C$1.2969. Some of last week's
losses were pared after data on Friday showed a surge in
domestic jobs.
    Also on Friday, data from the Commodity Futures Trading
Commission and Reuters calculations showed that speculators
increased bullish bets on the Canadian dollar. Canadian dollar
net long positions rose to 8,550 contracts as of Feb. 7 from
3,472 a week earlier.             
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries ahead of Yellen's
testimony. The two-year            dipped 1.5 Canadian cents to
yield 0.778 percent and the benchmark 10-year            
declined 19 Canadian cents to yield 1.719 percent.

 (Reporting by Fergal Smith; Editing by Nick Zieminski)
  
 

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