November 14, 2018 / 9:29 PM / 2 years ago

CANADA FX DEBT-C$ steadies near four-month low as oil prices stabilize

 (Adds strategist quotes and details throughout; updates prices)
    * Canadian dollar trades near flat against the greenback
    * Price of U.S. oil climbs 1 percent
    * Canadian bond prices rise across the yield curve

    By Fergal Smith
    TORONTO, Nov 14 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Wednesday, holding near
its weakest level since July, as the recent sell-off in oil lost
some momentum and the greenback declined broadly.
    The price of oil, one of Canada's major exports, rose on
hopes for output cuts after a steep drop a day earlier, while a
gauge of global stock markets fell for a fifth straight session
as declines in tech and financial shares pressured Wall Street.
    U.S. crude oil futures settled 1 percent higher at $56.25 a
    "Oil has stabilized, but there are other fears out there,"
said Eric Theoret, a currency strategist at Scotiabank. "It's
really not an environment where you expect the Canadian dollar
to do well."
    In addition to being a commodities exporter, Canada runs a
current account deficit, so its economy could be hurt if the
global flow of trade or capital slows.
    The overall perceived risk to the Canadian financial system
has increased slightly over the last six months, in part due to
unease over the global economic outlook, the Bank of Canada
    At 4:02 p.m. EST (2102 GMT), the Canadian dollar         
was trading nearly unchanged at 1.3234 to the greenback, or
75.56 U.S. cents. The currency earlier matched Tuesday's low of
1.3264, which was its weakest in nearly four months.
    The U.S. dollar        declined against a basket of
currencies as British Prime Minister Theresa May obtained
backing from her cabinet on her Brexit deal, boosting the euro
and sterling.       
    Data showing U.S. consumer prices grew in line with analysts
forecasts in October also weighed on the greenback. It
reinforced the view domestic inflation is increasing at a
moderate pace.          
    Canadian government bond prices were higher across the yield
curve in sympathy with U.S. Treasuries. The two-year           
rose 6.5 Canadian cents to yield 2.27 percent and the 10-year
            climbed 24 Canadian cents to yield 2.428 percent.

 (Reporting by Fergal Smith, editing by G Crosse)
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