April 13, 2018 / 8:56 PM / 6 months ago

CANADA FX DEBT-C$ dips with Wall Street but gains 1.4 pct on week

 (New throughout, updates prices and market activity, adds
dealer comments)
    * Canadian dollar at C$1.2606, or 79.33 U.S. cents
    * Loonie climbs 1.4 percent for the week
    * Bond prices rise across the yield curve
    * 10-year yield touches highest intraday since March 21

    By Fergal Smith
    TORONTO, April 13 (Reuters) - The Canadian dollar edged
lower on Friday against its U.S. counterpart as Wall Street
dipped, but the currency was up 1.4 percent for the week as
investors were optimistic a deal will be reached to expand a
major oil pipeline.
    At 4 p.m. EDT (2000 GMT), the Canadian dollar          was
trading 0.1 percent lower at C$1.2606 to the greenback, or 79.33
U.S. cents. The currency traded in a range of C$1.2553 to
C$1.2617.
    On Wednesday, the loonie touched its strongest in more than
seven weeks at C$1.2545.
    "We were probably due for a modest pullback," said Blake
Jespersen, managing director, foreign exchange sales at BMO
Capital Markets.
    "But with some of the positive talk around a potential NAFTA
deal being agreed to shortly and with some of the positive tone,
at least coming from (Finance Minister Bill) Morneau and (Prime
Minister Justin) Trudeau, on supporting the Trans Mountain
pipeline, investors are now looking at the Canadian dollar as
having more room to appreciate."
    Trudeau is due to meet the premiers of Alberta and British
Columbia on Sunday to discuss the pipeline.                
    U.S. trade negotiators have significantly softened their
demands to increase regional automotive content under a reworked
North American Free Trade Agreement, auto industry executives
said.             
    Financial stocks led a drop on Wall Street as results from
big banks failed to enthuse and geopolitical tensions in Syria
and Russia further unnerved investors.             
    Canada's commodity-linked currency tends to track movement
in stocks due to the signals that market may send about
prospects for economic growth.
    The price of oil, one of Canada's major exports, rose to its
highest in more than three years. U.S. crude oil futures       
settled 0.5 percent higher at $67.39 a barrel.                 
    The Bank of Canada is likely to raise interest rates twice
more this year as the economy regains momentum in the current
quarter but will hold them steady at its April 18 meeting,
according to a Reuters poll of economists.             
    Speculators have trimmed slightly bearish bets on the
Canadian dollar, data from the U.S. Commodity Futures Trading
Commission and Reuters calculations showed. As of April 10, net
short positions had fallen to 31,672 contracts from 31,872 a
week earlier.
    Canadian government bond prices were higher across the yield
curve, with the 10-year             rising 35 Canadian cents to
yield 2.24 percent. The 10-year yield touched its highest
intraday since March 21 at 2.288 percent.

 (Reporting by Fergal Smith; Editing by Bernadette Baum and
David Gregorio)
  
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