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CANADA FX DEBT-C$ strengthens as French vote lifts risk appetite
April 24, 2017 / 1:34 PM / 5 months ago

CANADA FX DEBT-C$ strengthens as French vote lifts risk appetite

    * Canadian dollar at C$1.3456, or 74.32 U.S. cents
    * Loonie hits strongest since April 19 at C$1.3410
    * Bond prices lower across the yield curve
    * 10-year yield hits 12-day high at 1.541 percent

    TORONTO, April 24 (Reuters) - The Canadian dollar
strengthened against its U.S. counterpart on Monday after the
French election result boosted investors' appetite for risk and
also as data showed domestic wholesale trade fell less than
expected.
    Euro zone stock indexes were headed for their best day in
almost two years after the market's favored candidate won the
first round of the French election. That reduced the risk of
another shock like 'Brexit,' Britain's impending exit from the
European Union, that could weigh on the global economic outlook.
            
    Canada's commodity-linked currency tends to benefit from
improved economic sentiment.      
    Canadian wholesale trade declined in February after four
months of gains amid weakness in the household goods and food
sectors, data from Statistics Canada showed.              
    The 0.2 percent decrease was not as steep as the 1.0 percent
decline economists had forecast. Sales volumes fell 0.4 percent.
    At 9:18 a.m. ET (1318 GMT), the Canadian dollar          was
trading at C$1.3456 to the greenback, or 74.32 U.S. cents,
stronger than Friday's close of C$1.3503, or 73.91 U.S. cents.
    The currency's weakest level of the session was C$1.3500,
while it touched its strongest since April 19 at C$1.3410.
    Last week, the loonie fell 1.3 percent, pressured by
cooler-than-expected domestic inflation and a slide in prices
for oil, one of the country's main exports.
    U.S. crude        prices were down 0.14 percent at $49.55 a
barrel on Monday as a rise in U.S. drilling offset expectations
that the Organization of the Petroleum Exporting Countries will
extend output cuts till the end of 2017.             
    Speculators have increased bearish bets on the Canadian
dollar to the most since February 2016, data from the Commodity
Futures Trading Commission and Reuters calculations showed on
Friday. Canadian dollar net short positions increased to 33,252
contracts as of April 18 from 32,334 a week earlier.
                
    Canadian government bond prices were lower across the yield
curve as the French vote reduced demand for safe-haven
government bonds. The two-year            price fell 6 Canadian
cents to yield 0.747 percent and the 10-year            
declined 45 Canadian cents to yield 1.52 percent.
    The 10-year yield touched its highest intraday since April
12 at 1.541 percent.
    Bank of Canada Governor Stephen Poloz said on Saturday he
was happy that Ontario had brought in new measures to tackle the
Toronto housing market, saying a foreign buyers tax should help
dampen demand and impact the psychology of speculators.
            
    Canadian retail sales data for February is due on Wednesday.
        

 (Reporting by Fergal Smith; Editing by Bernadette Baum)
  
 

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