June 16, 2020 / 8:16 PM / 24 days ago

CANADA FX DEBT-Canadian dollar outperforms G10 peers as economic outlook improves

 (Adds strategist quote and details throughout, updates prices)
    * Canadian dollar rises 0.1% against the greenback
    * Foreign investors buy C$49.04 billion in Canadian
securities
    * Price of U.S. oil increases 3.4%
    * Canadian bond yields rise across a steeper curve

    By Fergal Smith
    TORONTO, June 16 (Reuters) - The Canadian dollar
strengthened across the board against G10 currencies on Tuesday
as a jump in U.S. retail sales bolstered the economic outlook
and domestic data showed record demand for Canadian securities
in April.
    A record increase in U.S. retail sales in May, following two
straight months of declines, reinforced a growing belief that
the worst may be over for the world's largest economy,
bolstering the U.S. dollar against a basket of major currencies.
            
    "If you get a faster recovery than anticipated in retail
sales south of the border, I think north of the border people
feel encouraged that it is going to echo the same there," said
Amo Sahota, director at Klarity FX in San Francisco.
    Foreign investors bought a record C$49.04 billion in
Canadian securities in April, all in debt securities, Statistics
Canada said. Canada runs a current account deficit so its
economy is dependent on foreign inflows.             
    The Canadian dollar        was trading 0.1% higher at 1.3562
to the greenback, or 73.74 U.S. cents. The currency, which on
Monday hit a two-week low at 1.3685, traded in a range of 1.3504
to 1.3622.
    The modest gain for the loonie came as Tiff Macklem, in his
first public appearance as governor of the Bank of Canada, said
the central bank would provide an updated assessment of the
outlook for output and inflation when it announces its July
interest rate decision.             
    The price of oil, one of Canada's major exports, rose as
Wall Street surged and the International Energy Agency increased
its oil demand forecast for 2020. U.S. crude oil futures       
settled 3.4% higher at $38.38 a barrel.             
    Canadian government bond yields were higher across a steeper
curve, with the 10-year             up 3.6 basis points at
0.555%. On Monday, the 10-year yield hit a one-month low at
0.468%.

 (Reporting by Fergal Smith
Editing by Alistair Bell and Tom Brown)
  
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