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CANADA FX DEBT-C$ settles into a holding pattern after Poloz speech
November 8, 2017 / 10:19 PM / in 14 days

CANADA FX DEBT-C$ settles into a holding pattern after Poloz speech

 (Adds dealer quotes and details on market activity; updates
prices)
    * Canadian dollar at C$1.2724, or 78.59 U.S. cents
    * Bond prices retreat across the yield curve
    * Prices of oil settle 0.7 percent lower

    By Fergal Smith
    TORONTO, Nov 8 (Reuters) - The Canadian dollar strengthened
against its U.S. counterpart on Wednesday but held within its
recent range after failing to get additional guidance from a
speech the day before by Bank of Canada Governor Stephen Poloz.
    At 4 p.m. EST (2100 GMT), the Canadian dollar          was
trading at C$1.2724 to the greenback, or 78.59 U.S. cents, up
0.4 percent.
    The currency has recovered from a 3-1/2 month low at
C$1.2916 less than two weeks ago to touch on Monday its
strongest in 12 days at C$1.2701. It traded on Wednesday between
C$1.2715 and C$1.2777.
    "Markets are range-bound," said David Bradley, director of
foreign exchange trading at Scotiabank. 
    In a speech and news conference on Tuesday, Poloz maintained
a neutral tone on the next interest rate move, repeating the
bank's message that it was monitoring wage growth and inflation,
as well as economic capacity to see how the economy was
adjusting to rate hikes in July and September.             
    "I don't think that the tone he gave off yesterday would
cause anyone to think that the path of rates is going to change
from before he spoke," Bradley said.
    The central bank held its benchmark rate steady at 1 percent
in October and investors expect no further increases until the
first half of 2018.           
    Canadian seasonally adjusted housing starts were 222,771 in
October, increasing from a revised 219,293 units in September.
            
    In separate domestic housing data, the value of building
permits rose by 3.8 percent in September from August, the first
increase in three months.             
    Prices of oil, one of Canada's major exports, fell after
U.S. government data showed rising domestic crude production, a
surprise build in U.S. stockpiles and a decline in monthly
Chinese crude imports, a triple blow that was offset somewhat by
rising tensions in the Middle East.             
    U.S. crude        prices settled 0.7 percent lower at $56.81
a barrel.
    Canada will not be rushed into the Trans Pacific
Partnership, so as to ensure a deal that serves its best
interests, Prime Minister Justin Trudeau said on Wednesday.
            
    Canadian government bond prices were lower across the yield
curve as investors digested federal and provincial bond supply,
while U.S. Treasuries also lost ground.
    The two-year            fell 4 Canadian cents to yield 1.42
percent and the 10-year             declined 18 Canadian cents
to yield 1.915 percent.

 (Reporting by Fergal Smith; Editing by Lisa Shumaker)
  
 

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