October 9, 2019 / 8:52 PM / a month ago

CANADA FX DEBT-Loonie sits tight as investors seek clues on rate outlook

 (Adds dealer quotes and details throughout; updates prices)
    * Canadian dollar trades near flat against the greenback
    * Loonie trades in a range of 1.3296 to 1.3334
    * Price of U.S. oil decreases 0.1%
    * Canadian bond prices fall across the yield curve

    By Fergal Smith
    TORONTO, Oct 9 (Reuters) - The Canadian dollar was little
changed against the U.S. dollar on Wednesday, extending this
week's holding pattern, as markets awaited a clearer signal from
central banks on the outlook for interest rates.
    At 4:01 p.m. (2001 GMT), the Canadian dollar          was
trading nearly unchanged at 1.3331 to the greenback, or 75.01
U.S. cents. The currency traded in a range of 1.3296 to 1.3334.
    Since the start of the week, the range has been only
slightly wider at between 1.3289 and 1.3336.
    "The market is in a real snooze fest right now," said Amo
Sahota, director at Klarity FX in San Francisco. "Maybe the
market is waiting for the next central bank meetings to come
out."  
    Both the Bank of Canada and the Federal Reserve will make
their next interest rate decision on October 30.
    Most Fed policymakers supported the need for an interest
rate cut in September, minutes of the central bank's last policy
meeting showed on Wednesday, but they remain increasingly
divided on the path ahead for monetary policy.                 
    Canada's employment report for September, due on Friday, can
help guide expectations for the Bank of Canada policy outlook.
    Robust job gains this year have supported the Canadian
central bank's decision to leave its benchmark interest rate on
hold at 1.75%.
    The Canadian dollar has found support this month each time
it has approached the area around 1.3350.
    If that support level is broken, then "there is room" for
the currency to weaken to 1.35, Sahota said.
    The price of oil, one of Canada's major exports, gave up its
earlier gains as a build in U.S. crude inventories offset
potential disruption to supply and hopes of progress in ending
the U.S.-China trade war. U.S. crude oil futures        settled
0.1% lower at $52.59 a barrel.    
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries after a flood of supply.
The two-year            fell 6 Canadian cents to yield 1.474%
and the 10-year             was down 31 Canadian cents to yield
1.312%.             

 (Reporting by Fergal Smith; Editing by Bernadette Baum and
Grant McCool)
  
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