January 16, 2019 / 9:08 PM / 9 months ago

CANADA FX DEBT-C$ firms with oil as global issues grab investor focus

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    * Canadian dollar rises 0.1 percent against the greenback
    * Price of U.S. oil gains 0.4 percent
    * Canadian bond prices decline across the yield curve
    * 10-year yield touches three-week high at 2.002 percent

    By Fergal Smith
    TORONTO, Jan 16 (Reuters) - The Canadian dollar edged higher
against its U.S. counterpart on Wednesday as oil prices rose and
Wall Street's main indexes hit a one-month high, but investor
interest in the currency was dulled by global issues including
British political uncertainty.
    British Prime Minister Theresa May saw off a no-confidence
vote, a day after lawmakers defeated her Brexit divorce deal,
while recent trade data from China has raised investor worries
of a global economic slowdown.             
    "The Canuck buck remains confined to the children's table of
global currencies," said Brad Schruder, director of corporate
sales and structuring at BMO Capital Markets. "The market is
focused on bigger picture global issues."    
    Stocks were boosted by upbeat earnings from the banking
sector, and the price of oil, one of Canada's major exports,
added to Tuesday's sharp rally. U.S. crude oil futures       
settled up 0.4 percent at $52.31 a barrel.
                            
    At 3:33 p.m. (2033 GMT), the Canadian dollar          was
trading 0.1 percent higher at 1.3248 to the greenback, or 75.48
U.S. cents. The currency, which has climbed 2.9 percent since
the start of 2019, traded in a range of 1.3236 to 1.3293.    
    "The loonie has gained slightly over the last two sessions
but the moves are muted," Schruder said. "There is no
significant interest by large corporate firms to get involved
here."
    Narrow ranges for the loonie come ahead of the release on
Friday of Canada's inflation report for December, which could
help guide expectations for future interest rate hikes from the
Bank of Canada.
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries. The two-year           
fell 5.5 Canadian cents to yield 1.923 percent and the 10-year
            declined 25 Canadian cents to yield 2.000 percent.
    The 10-year yield touched its highest intraday since Dec. 24
last year at 2.002 percent.
    Canada is planning to issue a global bond denominated in
U.S. dollars later this week, subject to market conditions, the
country's Department of Finance said.             

 (Reporting by Fergal Smith
Editing by Phil Berlowitz)
  
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