October 12, 2018 / 8:28 PM / 2 months ago

CANADA FX DEBT-C$ steadies as oil and stock prices rebound

 (New throughout)
    * Canadian dollar trades near flat against the greenback
    * Loonie falls 0.7 percent for the week
    * Price of U.S. oil rises 0.5 percent 
    * Canada-U.S. 10-year spread widens by 3.7 basis points

    By Fergal Smith
    TORONTO, Oct 12 (Reuters) - The Canadian dollar was little
changed against a broadly stronger greenback on Friday as oil
and stock prices rebounded, but the loonie lost ground for the
week as investors worried about threats to the global growth
outlook.
    At 3:47 p.m. (1947 GMT), the Canadian dollar          was
trading nearly unchanged at 1.3037 to the greenback, or 76.70
U.S. cents.
    The currency, which on Thursday touched its weakest intraday
level in nearly two weeks at 1.3077, traded in a range of 1.3003
to 1.3052.
    For the week, the loonie was down 0.7 percent as investors
worried that higher bond yields and trade conflicts could hurt
global economic growth.
    "You've had this fundamental backdrop that markets are
paying attention to, including the increased tension between the
United States and China which doesn't bode well if your currency
moves with growth dynamics globally," said Bipan Rai, North
America head of FX strategy at CIBC Capital Markets.
    Canada exports many commodities, including oil, and runs a
current account deficit so its economy could suffer if the flow
of trade or capital slows.          
    The price of oil pared some of this week's losses despite a
report from the International Energy Agency that deemed supply
adequate and the outlook for demand weakening.             
    U.S. crude oil futures        settled 0.5 percent higher at
$71.34 a barrel.
    Canadian heavy crude sells for much less than the price of
U.S. oil, with the differential reaching the widest level ever
this week at more than $50, according to Shorcan Energy Brokers.
    "I do think that the discount of WCS (Western Canada Select)
to WTI (West Texas Intermediate) matters and that is part of the
reason why CAD hasn't participated in the crude rally over the
last several weeks," Rai said.
    The U.S. dollar        climbed against a basket of
currencies as global equity prices rebounded from this week's
rout and robust Chinese export figures soothed worries about the
world's second-biggest economy and its trade war with
Washington.             
    Canadian home prices were unchanged in September from August
as the number of areas across the country posting price gains
declined, data showed.             
    Canadian government bond prices were higher across a flatter
 yield curve, with the 10-year             rising 18 Canadian
cents to yield 2.480 percent.
    The gap between Canada's 10-year yield and its U.S.
counterpart widened by 3.7 basis points to a spread of 66.6
basis points in favor of the U.S. bond.

 (Reporting by Fergal Smith
Editing by Phil Berlowitz)
  
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