May 10, 2017 / 1:46 PM / 4 months ago

CANADA FX DEBT-C$ strengthens as oil rallies, trade concerns ease

    * Canadian dollar at C$1.3686, or 73.07 U.S. cents
    * Bond prices higher across the yield curve

    TORONTO, May 10 (Reuters) - The Canadian dollar strengthened
on Wednesday against its U.S. counterpart as oil prices rose and
after comments by U.S. Commerce Secretary Wilbur Ross appeared
to represent another move to the center by the Trump
administration.    
    Prices of oil, one of Canada's major exports, rose after a
larger-than-expected fall in U.S. crude inventories. U.S. crude
       prices were up 1.57 percent at $46.6 a barrel.
    Ross signaled on Tuesday in an interview with Reuters that
the Trump administration would try to use existing tools to
aggressively enforce trade rules and insist on fairer treatment
for U.S. goods, rather than adopt the slash-and-burn approach
U.S. President Donald Trump had discussed on the campaign trail
in 2016.             
    At 9:29 a.m. ET (1329 GMT), the Canadian dollar          was
trading at C$1.3686 to the greenback, or 73.07 U.S. cents, up
0.2 percent, according to Reuters data.
    The currency traded in a range of C$1.3678 to C$1.3732.
    Gains for the loonie came as the U.S. dollar        dipped
against a basket of major currencies, with news that Trump had
abruptly fired FBI Director James Comey dampening some of this
week's strong risk appetite.
    The loonie had hit a 14-month low on Friday at C$1.3793. It
has been pressured recently by lower commodity prices, concerns
about a possible North American Free Trade Agreement
renegotiation and investor wariness about how troubles at
alternative lender Home Capital Group Inc          could affect
Canada's real estate market.
    Home Capital published data on Wednesday showing depositors
were continuing to withdraw funds but at a slower rate than
before.             
    The Liberal Party squeaked to victory in British Columbia
elections, but it lost its majority after 16 years in power
which left the future of big oil and gas projects in the region
unclear.             
    Canadian government bond prices rose across the yield curve
in sympathy with U.S. Treasuries. The two-year            edged
up 1 Canadian cent to yield 0.717 percent and the 10-year
            climbed 20 Canadian cents to yield 1.599 percent.

 (Reporting by Fergal Smith; Editing by Meredith Mazzilli)
  
 

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