November 22, 2018 / 9:42 PM / 2 years ago

CANADA FX DEBT-C$ strengthens as Alberta commits to measure to move oil

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    * Canadian dollar rises 0.4 percent against the greenback
    * Price of U.S. oil falls 1.4 percent
    * Canadian bond prices dip across much of the yield curve

    By Fergal Smith
    TORONTO, Nov 22 (Reuters) - The Canadian dollar strengthened
against its U.S. counterpart on Thursday as the greenback
broadly fell and Alberta said it would proceed with a measure
which could help soften the blow from price discounts on heavy
crude generated by pipeline congestion.
    Alberta is willing to buy trains itself to help clear a
backlog of crude oil if Ottawa decides not to back the Canadian
province's proposal to split the costs of new rail cars, Premier
Rachel Notley said.             
    Reuters reported exclusively late on Wednesday that Alberta
has asked Ottawa to share the cost of buying rail capacity to
move more crude.             
    "They (the federal government) are only just waking up to
the idea that there's a crisis perhaps brewing out west," said
Michael Goshko, corporate risk manager at Western Union Business
Solutions. "If they are moving on measures that can be quickly
and easily implemented, then good on them."
    Canadian heavy crude traded last month as much as $52.50 per
barrel below West Texas Intermediate light oil, its biggest
differential in data going back to 2010, according to Shorcan
Energy Brokers.
    Recent weakening in the price of U.S. oil has added to
headwinds for Canada's oil patch. On Thursday, oil prices fell
after U.S. crude inventories swelled to their highest level
since December.             
    U.S. crude        prices were down 1.4 percent at $53.85 a
    At 4:24 p.m. (2124 GMT), the Canadian dollar          was
trading 0.4 percent higher at 1.3184 to the greenback, or 75.85
U.S. cents, in holiday impacted trading with U.S. markets shut
for Thanksgiving.
    The currency, which touched on Tuesday its weakest in nearly
five months at 1.3318, traded in a range of 1.3181 to 1.3245.   
    The gain for the loonie came after Finance Minister Bill
Morneau said on Wednesday that Canada will allow businesses to
write off additional capital investments to make them more
competitive at a time when the United States is aggressively
cutting taxes.             
    The U.S. dollar        fell on Thursday against a basket of
major currencies after Britain and the European Union agreed in
principle to a text setting out their future relationship before
a summit on Sunday, boosting the euro and sterling.             
    Canadian government bond prices were lower across much of
the yield curve, with the 10-year             falling 4 Canadian
cents to yield 2.366 percent.
    Canada's inflation report for October and September retail
sales data are due on Friday.

 (Reporting by Fergal Smith
Editing by Susan Thomas)
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