June 24, 2020 / 7:19 PM / 11 days ago

CANADA FX DEBT-Canadian dollar falls as rising coronavirus cases pressures stocks

 (Adds strategist quote and details throughout; updates prices)
    * Canadian dollar falls 0.5% against the greenback
    * Fitch downgrades Canada's rating to "AA+" from "AAA" 
    * Price of U.S. oil decreases 5.9%
    * Canadian bond yields trade mixed across a steeper yield
curve

    By Fergal Smith
    TORONTO, June 24 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Wednesday as signs of
acceleration in coronavirus cases worried investors and Fitch
lowered Canada's sovereign rating to below AAA for the first
time since August 2004.
    Global shares          fell as a rising number of
coronavirus cases in the United States, China, Latin America and
India dampened hopes of a swift recovery in the global economy.
                
    The loonie's decline "today is related more to global
capital flows than domestic events," said Colin Cieszynski,
chief market strategist at SIA Wealth Management.
    Canada runs a current account deficit and is a major
producer of commodities, including oil, so the loonie tends to
be sensitive to the flow of trade and capital.
    U.S. crude        prices settled 5.9% lower at $38.01 a
barrel, pressured by record-high inventories as well as worries
about a second wave of the pandemic.             
    Fitch downgraded Canada's sovereign rating for the first
time, to "AA+" from "AAA," citing deterioration of the country's
public finances in 2020 because of the COVID-19 pandemic.
                
    The Canadian dollar        was trading 0.5% lower at 1.3607
to the greenback, or 73.49 U.S. cents. The currency, which
traded on Tuesday at its strongest intraday level in nearly two
weeks at 1.3482, traded in a range of 1.3527 to 1.3617.
    Canadian house prices will rise at a much slower pace this
year than predicted only three months ago and will fall in 2021
as the coronavirus pandemic pushes up unemployment, curtailing
immigration and the demand for homes, a Reuters poll showed on
Wednesday.             
    Canadian government bond yields were mixed across a steeper
curve, with the 30-year yield             up 1.8 basis points at
1.031%.

 (Reporting by Fergal Smith; Editing by Jonathan Oatis and Peter
Cooney)
  
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