November 12, 2019 / 3:32 PM / a month ago

CANADA FX DEBT-C$ recovers from 1-month low amid hopes for trade reassurance

    * Canadian dollar rises 0.1% against the greenback
    * Price of U.S. oil increases 0.8%
    * Loonie touches its weakest intraday since Oct. 11
    * 10-year yield exceeds 2-year yield for first time since
July 25

    TORONTO, Nov 12 (Reuters) - The Canadian dollar edged higher
against its U.S. counterpart on Tuesday, recovering from an
earlier one-month low, as oil prices rose and investors awaited
a speech by U.S. President Donald Trump for clues on the outlook
for trade conflicts.
    World shares          and benchmark government bond yields
inched higher on hopes that Trump, who is due to speak at the
Economic Club of New York later on Tuesday, would provide
reassurances that trade talks with China were progressing and
signal that a decision on European car tariffs would be delayed.
            
    Canada is a major exporter of commodities, including oil, so
its economy could benefit from a reduction in global trade
uncertainty.
    U.S. crude oil futures        were up 0.8% at $57.33 a
barrel, buoyed by trade hopes and lower inventories at a U.S.
oil hub.             
    At 9:49 a.m. (1449 GMT), the Canadian dollar          was
trading 0.1% higher at 1.3223 to the greenback, or 75.63 U.S.
cents. The currency's strongest level of the session was 1.3217,
while it touched its weakest since Oct. 11 at 1.3257.
    The one-month intraday low for the loonie came after data on
Friday showed a surprise Canadian jobs decline in October.
            
    The currency has declined as much as 1.3% since the Bank of
Canada shifted nearly two weeks ago to a more dovish stance.
    Still, investors have raised bullish bets on the loonie to
the highest level since October 2017, data from the U.S.
Commodity Futures Trading Commission and Reuters calculations
showed on Friday. As of Nov. 5, net long positions in the
currency had climbed to 54,002 contracts from 43,589 in the
prior week.                 
    Canadian government bond prices were lower across a steeper
yield curve as trading resumed after a holiday on Monday in
observance of Remembrance Day. The two-year            fell 2.5
Canadian cents to yield 1.598% and the 10-year             was
down 24 Canadian cents to yield 1.607%.
    It was the first time since July 25 that the 10-year yield
traded above the 2-year yield. Reversion of the yield curve to
upward sloping could reduce fears of an economic slowdown.

 (Reporting by Fergal Smith; 
Editing by Sandra Maler)
  
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