November 21, 2018 / 7:56 PM / 24 days ago

CANADA FX DEBT-C$ strengthens as oil prices and stocks rebound

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    * Canadian dollar rises 0.5 percent vs greenback
    * Price of U.S. oil rises 2.3 percent
    * Canadian wholesale trade falls 0.5 percent in September
    * Canadian bond prices dip across a flatter yield curve

    By Fergal Smith
    TORONTO, Nov 21 (Reuters) - The Canadian dollar strengthened
against its U.S. counterpart on Wednesday, as a rebound in oil
prices and stocks offset domestic data showing a surprise
decline in wholesale trade for September.
    At 2:31 p.m. ET (1931 GMT), the Canadian dollar          was
trading 0.5 percent higher at 1.3247 to the greenback, or 75.49
U.S. cents.
    The currency, which touched its weakest level in nearly five
months on Tuesday at 1.3318, traded in a range of 1.3237 to
1.3317.    
    "The Canadian dollar is all about global risk sentiment,"
said Brad Schruder, director of corporate sales and structuring
at BMO Capital Markets. "If oil and equities can find some type
of base here, then the Canadian dollar has potential to rally
over two-and-a-half cents." 
    The price of oil, one of Canada's major exports, bounced
from the lowest levels in months after U.S. government data
showed strong demand for refined fuel, but concerns remained
over rising global crude supply.             
    U.S. crude oil futures        settled 2.3 percent higher at
$54.63 a barrel, while U.S. stock futures recouped some losses
after a brutal two-day sell-off pushed the S&P 500 and the Dow
Jones Industrial Average into the red for the year.             
    In addition to being a major commodities exporter, Canada
runs a current account deficit. Its economy could be hurt if the
global flow of trade or capital slows.
    Data from Statistics Canada showed that wholesale trade
decreased by 0.5 percent in September from August, as weaker
sales in the machinery, equipment and supplies subsector led the
decline. Analysts surveyed by Reuters had forecast a 0.3 percent
increase.
    Canadian Prime Minister Justin Trudeau's government will
release a regular fall budget update at about 4 p.m. (2100 GMT).
The update comes less than a year before the next national
election.
    Canada's inflation report for October and retail sales data
for September are due on Friday.
    Canadian government bond prices were lower across a flatter
yield curve in sympathy with U.S. Treasuries. The two-year
           fell 3.2 Canadian cents to yield 2.233 percent and
the benchmark 10-year             declined 9 Canadian cents to
yield 2.361 percent.
    On Tuesday, the 10-year yield touched its lowest in more
than two months at 2.332 percent.

 (Reporting by Fergal Smith; Editing by Lisa Shumaker)
  
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