October 17, 2019 / 1:50 PM / a month ago

CANADA FX DEBT-C$ climbs to 5-week high as investors cheer Brexit deal

    * Canadian dollar rises 0.2% against the greenback
    * Canadian manufacturing sales increase by 0.8% in August
    * Canada adds 28,200 jobs in September 
    * Canadian bond prices fall across the yield curve

    TORONTO, Oct 17 (Reuters) - The Canadian dollar strengthened
to a five-week high against its U.S. counterpart on Thursday as
investors welcomed an eleventh-hour Brexit deal and domestic
data showed a stronger-than-expected gain for factory sales in
August.
    Canadian manufacturing sales increased by 0.8% in August
from July on higher motor vehicle sales, as well as fabricated
metal products, Statistics Canada said. Analysts had forecast a
0.6% increase.             
    Separate data from payroll services provider ADP showed that
Canada added 28,200 jobs in September, building on a blockbuster
increase of 109,900 in an upwardly revised reading for the 
previous month.             
    The encouraging data could support expectations for the Bank
of Canada to leave its benchmark interest rate unchanged at
1.75% when the central bank announces its next rate decision on
Oct. 30.
    Global stocks          rose and the U.S. dollar        lost
ground after Britain struck a preliminary last-minute deal with
the European Union helping to ease some geopolitical jitters.
                        
    Canada runs a current account deficit and is a major
exporter of commodities, including oil, so its economy could
benefit from a pick-up in the global flow of capital or trade.
    U.S. crude oil futures        were down 0.5% at $53.09 a
barrel as industry data showed a larger-than-expected build-up
in U.S. inventories.             
    At 9:09 a.m. (1309 GMT), the Canadian dollar          was
trading 0.2% higher at 1.3163 to the greenback, or 75.97 U.S.
cents. The currency touched its strongest intraday level since
Sept. 11 at 1.3157.
    The gain for the loonie came ahead of a federal election on
Monday. Opinion polls show that Prime Minister Justin Trudeau's
Liberal Party, in power since 2015, is locked in a tie with the
opposition Conservatives and will lose its majority in the House
of Commons.             
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries. The two-year           
fell 1.8 Canadian cents to yield 1.654% and the 10-year
            was down 11 Canadian cents to yield 1.560%.
    The 10-year yield touched its highest intraday since July 16
at 1.608%.         

 (Reporting by Fergal Smith
Editing by Chizu Nomiyama)
  
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