April 30, 2020 / 8:58 PM / a month ago

CANADA FX DEBT-C$ weakens along with stocks but posts monthly gain of 1%

 (Adds strategist quotes and details throughout, updates prices)
    * Canadian dollar falls 0.3% against the greenback
    * Loonie notches a six-week high at 1.3850
    * Price of U.S. oil increases 25%
    * Canada's GDP was flat in February 

    By Fergal Smith
    TORONTO, April 30 (Reuters) - The Canadian dollar weakened
against the greenback on Thursday as Wall Street lost ground and
domestic data showed no economic growth in the month before
coronavirus-related lockdowns began, but the currency still
posted its first monthly gain this year.
    At 4:27 p.m. (2027 GMT), the Canadian dollar          was
trading 0.3% lower at 1.3920 to the greenback, or 71.84 U.S.
cents. The currency notched its strongest intraday level since
March 16 at 1.3850, while it ended April up 1%, its first
monthly advance since December.
    Technical resistance near 1.3800 and a loss of positive
momentum for risk appetite weighed on the loonie, said Amo
Sahota, director at Klarity FX in San Francisco.
    "There is a slight exhaustion in optimism in the market
place, particularly as U.S. stocks drop," Sahota said.
    U.S. stocks fell as grim economic data and mixed earnings
prompted investors to take some profits at the close of Wall
Street's best month in decades.                 
    Canada runs a current account deficit and is a major
exporter of commodities, including oil, so the domestic economy
tends to be dependent on the global flow of trade and capital.
    The Canadian economy stalled in February, Statistics Canada
said, as parliament's budget watchdog warned that a dramatic
contraction was possible this year, with a spike in deficit and
debt levels.             
    U.S. crude oil futures        settled 25% higher at $18.84 a
barrel after several producers said they would cut output and as
signs the U.S. crude glut was not growing as quickly as many had
feared brought an upbeat close to one of the most volatile
months for oil trading in history.             
    Canada's coronavirus curve is flat but some worrying trends
are emerging, particularly outbreaks in vulnerable indigenous
communities, the country's top medical officer said.
            
    Canadian government bond yields eased across a flatter
curve. The 10-year yield             was down 2.7 basis points
at 0.539%.

 (Reporting by Fergal Smith; Editing by Will Dunham and
Marguerita Choy)
  
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