August 13, 2019 / 7:57 PM / 4 months ago

CANADA FX DEBT-Loonie strengthens as global trade tensions ebb

 (Adds strategist quote and details throughout, updates prices)
    * Canadian dollar rises 0.2% against the greenback
    * Price of U.S. oil increases 4%
    * Canadian bond prices move lower across the yield curve
    * Canada's curve inverts by the most in nearly two decades

    By Levent Uslu
    TORONTO, Aug 13 (Reuters) - The Canadian dollar edged higher
against its U.S. counterpart on Tuesday, with the currency
recovering from an earlier five-day low as easing of global
trade tensions raised investor risk appetite.
    The United States government will delay imposing a 10%
tariff on certain Chinese goods, including laptops and cell
phones, that had been scheduled to start next month, the Office
of the U.S. Trade Representative said.             
    "The news that some parts of the tariff list will be delayed
is constructive for risky assets and the Canadian dollar is
taking its cue from that," said Bipan Rai, North America head of
FX strategy at CIBC Capital Markets
    Canada runs a current account deficit and exports many
commodities, including oil, so its economy could be hurt by a
slowdown in the global flow of trade or capital.
    U.S. crude oil futures        settled 4% higher at $57.10 a
barrel as easing trade tensions reduced global demand concerns.
    At 3:10 p.m. (1910 GMT), the Canadian dollar          was
trading 0.2% higher at 1.3222 to the greenback, or 75.63 U.S.
cents. The currency's strongest intraday level was 1.3185, while
it touched its weakest since last Thursday at 1.3293.    
    Canadian government bond prices were lower across a flatter
yield curve in sympathy with U.S. Treasuries, as trade tensions
eased and data showed a pick-up in U.S. inflation.             
    The two-year            fell 9 Canadian cents to yield
1.376% and the 10-year             was down 30 Canadian cents to
yield 1.23%.
    The 10-year yield fell 1.7 basis points further below the
2-year yield to a spread of -14.6 basis points, the curve's
largest inversion since June 2000.

 (Reporting by Levent Uslu
Editing by Marguerita Choy)
  
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