September 25, 2018 / 2:07 PM / 2 months ago

CANADA FX DEBT-C$ sticks to tight range amid slow progress on NAFTA trade talks

    * Canadian dollar rises 0.1 percent against the greenback
    * Price of U.S. oil climbs 0.7 percent
    * Canada's 10-year yield touches a 4-month high at 2.472
percent

    TORONTO, Sept 25 (Reuters) - The Canadian dollar edged
higher against its U.S. counterpart on Tuesday as oil prices
rose, but the currency traded in a narrow range amid slow
progress on talks to renew the NAFTA trade deal ahead of a
U.S.-imposed deadline of the end of September. 
    Canadian Prime Minister Justin Trudeau took a cautious line
over talks to update the North American Free Trade Agreement,
saying he saw a possibility that Canada could build on a
bilateral deal that the United States and Mexico have already
struck.             
    As the month-end deadline for North American trade talks
nears, Canadian executives who hedge foreign exchange risk have
been changing their strategies so their companies can profit
from any possible swings in the Canadian dollar.               
    The price of oil, one of Canada's major exports, was boosted
by imminent U.S. sanctions on Iranian crude exports and the
apparent reluctance of OPEC and Russia to raise output to offset
the potential hit to global supply.             
    U.S. crude oil futures        were up 0.7 percent at $72.59
a barrel.
    At 9:42 a.m. (1342 GMT), the Canadian dollar          was
trading 0.1 percent higher at 1.2946 to the greenback, or 77.24
U.S. cents.
    The currency, which touched on Thursday its strongest in
more than three months at 1.2885, traded in a narrow range of
1.2946 to 1.2973.    
    Global stocks rose as oil higher oil prices lifted energy
shares and despite worries around the latest U.S.-China tariff
round and central bank rate hikes.             
    The Federal Reserve is expected on Wednesday to hike
interest rates for the third time this year. Clues from the Fed
on the path for future rate hikes could move the foreign
exchange market.             
    Bank of Canada Governor Stephen Poloz is due to speak on
Thursday. Money markets see a greater than 80 percent chance of
an interest rate increase from the central bank in October,
which would be the fifth hike since July 2017.           
    Canadian government bond prices were lower across the yield
curve, with the 10-year             falling 14 Canadian cents to
yield 2.467 percent. The 10-year yield touched its highest
intraday since May 22 at 2.472 percent.
    Canada's gross domestic product data for July is due on
Friday.

 (Reporting by Fergal Smith; Editing by David Gregorio)
  
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