April 24, 2017 / 9:21 PM / 6 months ago

CANADA FX DEBT-C$ fades to end weaker despite French vote boost

 (Adds comment, updates prices to close)
    * Canadian dollar ends at C$1.3516, or 73.99 U.S. cents
    * Loonie had hit strongest since April 19 at C$1.3410
    * Bond prices lower across the yield curve

    By Alastair Sharp
    TORONTO, April 24 (Reuters) - The Canadian dollar ended
weaker against its U.S. counterpart on Monday, with lower oil
prices helping erase sharp gains after a French election result
boosted investors' appetite for risk.
    The loonie, as the Canadian currency          is
colloquially known, settled at C$1.3516 to the greenback, or
73.99 U.S. cents, weaker than Friday's close of C$1.3503, or
73.91 U.S. cents.
    That loss came even as the U.S. currency fell against a
basket of currencies       .
    The Canadian dollar hit C$1.3410, its strongest level since
April 19, in morning trade that also included the release of
decent domestic data, but faded throughout the afternoon. It
fell 1.3 percent last week.
    "The market just can't seem to find a reason to like the
Canadian dollar," said Adam Button, currency analyst at
ForexLive in Montreal. "That speaks to unease about oil and
(Bank of Canada Governor Stephen) Poloz's repeated warnings that
the economy is not as strong as it appears."
    Oil prices                slipped nearly 1 percent,
extending last week's decline, as investors worried about
whether OPEC will extend output cuts until the end of 2017 and
as Russia indicated it can lift output if the deal on curbs
lapses.      
    Oil is a major Canadian export.
    The central bank's Poloz said on Saturday he was happy that
Ontario had brought in new measures to tackle the Toronto
housing market, saying a foreign buyers tax should help dampen
demand and impact the psychology of speculators.             
    Canadian wholesale trade declined in February after four
months of gains amid weakness in the household goods and food
sectors, data from Statistics Canada showed.             
    The 0.2 percent decrease was not as steep as the 1.0 percent
decline economists had forecast. Sales volumes fell 0.4 percent.
    The loonie plunged against a surging euro and gained against
the Japanese yen, caught up in the broader cross-currents as
markets reacted to centrist Emmanuel Macron's win in the first
round of voting for the French presidency, pitting him against
far-right leader Marine Le Pen in a May 7 runoff.
    That reduced the risk of another shock like 'Brexit,'
Britain's impending exit from the European Union, that could
weigh on the global economic outlook.             
    Canadian government bond prices were lower across the yield
curve as the French vote reduced demand for safe-haven
government bonds. The two-year            price fell 4.5
Canadian cents to yield 0.739 percent and the 10-year
            slipped 18 Canadian cents to yield 1.488 percent.

 (Additional reporting by Fergal Smith; Editing by James
Dalgleish)
  
 

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