December 16, 2019 / 3:28 PM / 7 months ago

CANADA FX DEBT-C$ notches 7-week high as U.S.-China trade tensions cool

    * Canadian dollar rises 0.2% against the greenback
    * Loonie touches its strongest since Oct. 30 at 1.3115
    * Canadian home sales rise 0.6% in November
    * Canadian bond prices fall across the yield curve

    TORONTO, Dec 16 (Reuters) - The Canadian dollar strengthened
to a near seven-week high against its U.S. counterpart on Monday
after a U.S.-China trade agreement buoyed investor sentiment and
domestic data showed that home sales rose for the ninth straight
month.
    At 10:12 a.m. (1512 GMT), the Canadian dollar          was
trading 0.2% higher at 1.3138 to the greenback, or 76.12 U.S.
cents. The currency, which rose 0.6% last week, touched its
strongest intraday level since Oct. 30 at 1.3115.
    The United States and China cooled their trade war on
Friday, announcing a "phase one" agreement that reduces some
U.S. tariffs in exchange for what U.S. officials said would be a
big jump in Chinese purchases of American farm products and
other goods.
    Canada is a major exporter of commodities, including oil, so
its economy could benefit from an improved outlook for global
trade. U.S. crude oil futures        rose 0.2% to $60.21 a
barrel.   
    Canadian home sales rose 0.6% in November from the previous
month, the Canadian Real Estate Association said. The Bank of
Canada, which has resisted pressure this year to ease interest
rates, has pointed to housing activity as a source of resilience
in the Canadian economy.             
    Separate data, from Statistics Canada, showed that Foreign
investors bought a net C$11.32 billion in Canadian securities in
October, led by private corporate bonds.             
    Canadian Finance Minister Bill Morneau is due to deliver a
fiscal update at approximately 10:45 a.m. (1545 GMT). In March,
the government said it will run a deficit of C$19.8 billion in
2019-20.
    Speculators have cut their bullish bets on the Canadian
dollar, data from the U.S. Commodity Futures Trading Commission
and Reuters calculations showed on Friday. As of Dec. 10, net
long positions had decreased to 20,741 contracts from 21,471 in
the prior week.                  
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries. The two-year           
fell 6 Canadian cents to yield 1.691% and the 10-year
            was down 40 Canadian cents to yield 1.623%.

 (Reporting by Fergal Smith
Editing by Nick Zieminski)
  
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