November 15, 2019 / 8:51 PM / in 8 months

CANADA FX DEBT-Loonie recovers from one-month low as risk appetite climbs

 (Adds strategist quotes and details throughout; updates prices)
    * Canadian dollar rises 0.2% against the greenback
    * For the week, the loonie was nearly unchanged
    * Price of U.S. oil increases 1.7%
    * Canadian bond prices fall across the yield curve

    By Fergal Smith
    TORONTO, Nov 15 (Reuters) - The Canadian dollar strengthened
against its U.S. counterpart on Friday, lagging behind some
other commodity-linked currencies but recovering from a
one-month low the day before as investors grew more hopeful
about a U.S.-China trade deal.
    At 3:18 p.m. (2018 GMT), the Canadian dollar          was
trading 0.2% higher at 1.3226 to the greenback, or 75.61 U.S.
    The currency, which hit a one-month low at 1.3270 on
Thursday, traded in a range of 1.3217 to 1.3252. For the week,
the loonie was nearly unchanged.
    Wall Street's main stock indexes hit record highs after
White House economic adviser Larry Kudlow said on Thursday that
the United States and China were nearing a deal.             
    Canada is a major exporter of commodities, including oil, so
its economy could benefit from an improved global trade outlook.
U.S. crude oil futures        settled 1.7% higher at $57.72 a
    There is "a bit more of a pro-risk bias in the markets that
has lifted the commodity currencies generally but CAD has been
left behind in that move," said Shaun Osborne, chief currency
strategist at Scotiabank.
    Commodity-linked currencies, such as the Australian dollar
       and the New Zealand dollar        posted stronger gains
than the loonie, up 0.4% and 0.3% respectively.
    "We are pretty much in a holding pattern here around about
1.3250 (in USD-CAD) until we get some more information and we
should get some more information next week," Osborne said.
    Canada's inflation report for October is due next Wednesday
and September retail sales data is due next Friday, both of
which could help guide expectations for Bank of Canada interest
rate cuts.
    Bank of Canada Governor Stephen Poloz is due to speak next
Thursday. The loonie has declined as much as 1.5% since Oct. 30,
when the central bank left the door open to a possible interest
rate cut over the coming months to help the economy weather
trade uncertainty.                     
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries as increased risk
appetite reduced demand for government bonds.              
    The 10-year             fell 21 Canadian cents to yield
1.487%. On Thursday, the 10-year yield touched its lowest
intraday level since Nov. 4 at 1.464%.
    Foreign investors bought a net C$4.76 billion in Canadian
securities in September, Statistics Canada said on Friday.
Separate data from the Canadian Real Estate Association showed
homes sales held steady in October.                         

 (Reporting by Fergal Smith
Editing by Nick Zieminski and Tom Brown)
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