January 10, 2019 / 2:51 PM / 6 months ago

CANADA FX DEBT-C$ pares recent gains as trade deal optimism fades

    * Canadian dollar falls 0.2 percent against the greenback
    * Canadian new home prices were unchanged in November
    * Value of Canadian building permits rise 2.6 percent in
November 
    * Price of U.S. oil falls 1.4 percent
    * Bond prices rise across the yield curve

    TORONTO, Jan 10 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Thursday, reducing some recent
gains as fading investor optimism for a trade deal between the
United States and China weighed on stocks and oil prices.
    Stocks and the price of oil were pressured by a lack of
details on trade talks between the world's two largest
economies. U.S. crude oil futures        were down 1.4 percent
at $51.64 a barrel.                         
    Canada runs a current account deficit and exports many
commodities, including oil, so its economy could be hurt if
trade uncertainty drags on.
    At 9:28 a.m. (1428 GMT), the Canadian dollar          was
trading 0.2 percent lower at 1.3240 to the greenback, or 75.53
U.S. cents. The currency traded in a range of 1.3203 to 1.3251.
    On Wednesday, the loonie touched its strongest in more than
five weeks at 1.3180 as the Bank of Canada held interest rates
steady, as expected, but said more increases would be necessary
even though low oil prices and a weak housing market will harm
the economy in the short term.             
    New home prices in Canada were unchanged in November for the
fourth month in a row, matching the median forecast of analysts,
Statistics Canada said.             
    Separate data from Statistics Canada showed that the value
of Canadian building permits increased by 2.6 percent in
November from October. Analysts had expected a decrease of 0.5
percent.                 
    Canadian government bond prices were higher across the yield
curve in sympathy with U.S. Treasuries. The two-year           
rose 2 Canadian cents to yield 1.897 percent and the 10-year
            climbed 17 Canadian cents to yield 1.958 percent.
    On Wednesday, the 10-year yield touched its highest intraday
since Dec. 27 at 2.000 percent.

 (Reporting by Fergal Smith
Editing by Susan Thomas)
  
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