July 17, 2017 / 9:37 PM / 3 months ago

CANADA FX DEBT-C$ pulls back from 14-month high, home sales fall

 (Adds strategist comment, updates prices)
    * Canadian dollar at C$1.2688, or 78.81 U.S. cents
    * Loonie touches strongest since May 2016 at C$1.2627
    * Domestic home resales see largest drop in June since 2010
    * Bond prices mixed across the yield curve

    By Alastair Sharp
    TORONTO, July 17 (Reuters) - The Canadian dollar pulled back
against its U.S. counterpart after hitting a fresh 14-month high
on Monday, after domestic data showed a big drop in home sales.
    Resales of Canadian homes fell 6.7 percent in June from May,
the largest monthly drop since 2010 and the third straight
monthly decline as Toronto sales plunged, the Canadian Real
Estate Association said.             
    At 4 p.m. EDT (2000 GMT), the Canadian dollar          was
trading at C$1.2688 to the greenback, or 78.81 U.S. cents, down
0.3 percent.
    Last week, the loonie rose 1.8 percent as the Bank of Canada
raised rates for the first time in seven years and signaled it
will hike again over the coming months. The currency has gained
more than 6 percent since the central bank turned hawkish in
June.    
    "There's definitely a path towards greater Canadian dollar
appreciation," said Brad Schruder, director of corporate sales
and structuring at BMO Capital Markets. 
    He said gains for the loonie in the days after the hike
could push U.S. dollar sellers to trade on even small bounces,
while greenback buyers wait for even more advantageous terms.
    "The buyer, sensing this tectonic shift and blood in the
water, has taken a step back from an urgency perspective," he
said, adding that the Canadian currency could push below C$1.25.
    The currency's weakest level of the session was C$1.2699,
while it touched its strongest since May 2016 at $1.2627.
    In other domestic data, foreign investors ramped up
purchases of Canadian securities in May to C$29.5 billion, the
second largest amount on record.             
    Prices of oil, one of Canada's major exports, fell about 1
percent as investors await strong indications that an OPEC-led
effort to drain a glut was proving effective, while output
increases in some top producers eased, keeping losses in check.
            
    Speculators cut bearish bets on the loonie for a seventh
straight week, data from the U.S. Commodity Futures Trading
Commission and Reuters calculations showed on Friday.
            
    Canadian government bond prices were mixed across the yield 
curve, with the two-year            down 1.5 Canadian cents to
yield 1.198 percent and the 10-year             up 1 Canadian
cent to yield 1.894 percent.
    On Thursday, the 10-year yield touched its highest since
December 2014 at 1.948 percent.   
    Data on Canada's manufacturing sales for May is due on
Wednesday, while retail sales data for May and the June
inflation report are due out on Friday.         

 (Additional reporting by Fergal Smith; Editing by Bernadette
Baum and Sandra Maler)
  
 

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