October 31, 2019 / 2:31 PM / 21 days ago

CANADA FX DEBT-Canadian dollar steadies as data shows slowing economic growth

    * Canadian dollar trades near flat against the greenback
    * Canadian GDP increases 0.1% in August
    * Loonie on track to rise 0.6% for the month
    * Canadian bond prices rise across the yield curve

    By Fergal Smith
    TORONTO, Oct 31 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Thursday as domestic
data showed modest economic growth, with the currency steadying
after it was pressured the day before by a more dovish tone from
the Bank of Canada.
    At 10:03 a.m. (1403 GMT), the Canadian dollar          was
trading nearly unchanged at 1.3157 to the greenback, or 76.01
U.S. cents. The currency, which hit a near two-week low on
Wednesday at 1.3210, traded in a narrow range of 1.3148 to
1.3178.
    For the month, the loonie was on track to rise 0.6%.
    Canada's economy gained 0.1% in August, a touch less than
analysts expected, amid a rebound in manufacturing and an uptick
in services-producing industries, Statistics Canada data showed.
            
    "The big picture is that growth has throttled back to around
potential, or slightly lower, after a one-quarter bounce in the
spring," Doug Porter, chief economist at BMO Capital Markets,
said in a note.
    On Wednesday, the Bank of Canada cut domestic and global
growth forecasts as it held its benchmark interest rate steady
at 1.75% as expected. The central bank left the door open to a
possible cut over the coming months that could help the economy
weather the damaging effects of global trade conflicts.
    Uncertainty around a potential trade deal between the United
States and China weighed on Wall Street        on Thursday,
while the price of oil, one of Canada's major exports, was
pressured by rising U.S. crude oil stocks and weak factory
activity in China.                         
    U.S. crude oil futures        fell 1.1% to $54.44 a barrel.
    Meanwhile, the Canadian province of Alberta said it would
allow companies to produce additional oil if they move it by
rail, easing curtailment rules that were designed to reduce
transport bottlenecks.             
    Pipeline capacity shortages have led many companies to move
from Canada's energy sector. Oil and gas producer Encana Corp
         said on Thursday it will shift its base to the United
States.                 
    Canadian government bond prices were higher across the yield
curve in sympathy with U.S. Treasuries. The two-year           
rose 7 Canadian cents to yield 1.524% and the 10-year
            was up 35 Canadian cents to yield 1.413%.
    The 10-year yield touched its lowest intraday since Oct. 11
at 1.405%.

 (Reporting by Fergal Smith
Editing by Alistair Bell)
  
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