October 16, 2019 / 2:09 PM / a month ago

CANADA FX DEBT-Canadian dollar dips as inflation falls short of expectations

    * Canadian dollar falls 0.1% against the greenback
    * Canadian inflation holds steady at 1.9% in September
    * Price of U.S. oil increases 0.2%
    * Canadian bond prices trade mixed across a steeper yield
curve 

    TORONTO, Oct 16 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Wednesday after domestic data
showed that inflation rose less than expected in September.
    Canada's annual inflation rate held steady at 1.9% in
September, falling short of the 2.1% rate that analysts had
expected, data from Statistics Canada showed.             
    Still, the average of the Bank of Canada's three core
measures edged up to 2.1% from 2.0%, cementing expectations for
the central bank to leave its benchmark interest rate on hold at
1.75% later this month.               
    At 9:50 a.m. (1350 GMT), the Canadian dollar          was
trading 0.1% lower at 1.3215 to the greenback, or 75.67 U.S.
cents. The currency, which notched a one-month high on Friday at
1.3171 after data showing a second straight month of blockbuster
job gains, traded in a range of 1.3194 to 1.3243.
    The decline for the loonie came as Wall Street was pressured
by worries that legislation targeting the Hong Kong protests
would stoke more friction between the United States and China.
            
    Canada is a major exporter of commodities, including oil, so
its economy could be hurt by prolonged uncertainty for global
trade.
    Oil prices rose as investors pinned hopes on a potential
Brexit deal between Britain and the European Union and on
signals from OPEC and its allies that further supply curbs could
be possible. U.S. crude oil futures        were up 0.2% at
$52.90 a barrel.
    Canadian government bond prices were mixed, with the
two-year            up 2 Canadian cents to yield 1.679% and the
10-year             falling 1 Canadian cent to yield 1.564%.
    On Tuesday, the 10-year yield touched its highest level
intraday in nearly one month at 1.577%.

 (Reporting by Fergal Smith; Editing by Steve Orlofsky)
  
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