March 20, 2017 / 9:04 PM / 5 months ago

CANADA FX DEBT-C$ slightly weaker as oil prices weigh

 (Adds broker comment, updates prices to close)
    * Canadian dollar settles at C$1.3354, or 74.88 U.S. cents
    * Bond prices lower across the yield curve
    * 2 and 10-year yields fall to lowest since March 7

    By Alastair Sharp
    TORONTO, March 20 (Reuters) - The Canadian dollar weakened
slightly against its U.S. counterpart on Monday as lower oil
prices offset strong trade data and investors weighed the G20's
decision to avoid endorsing open trade.
    Financial leaders of the world's biggest economies
acquiesced to an increasingly protectionist United States on the
weekend by dropping the pledge to keep global trade free and
open.             
    "The market is clearly not interested in that type of
rhetoric, it's actually looking for something concrete to
trade," said Brad Schruder, director of corporate sales and
structuring at Bank of Montreal.
    The Canadian dollar          settled at C$1.3354 to the
greenback, or 74.88 U.S. cents, slightly weaker than Friday's
close of C$1.3337, or 74.98 U.S. cents.
    The currency traded in a range of C$1.3304 to C$1.3373.
    Schruder said the Canadian currency will likely track crude
oil prices more closely since the Federal Reserve's monetary
policy outlook is priced in and details on the tax plans of U.S.
President Donald Trump are likely several months away.
    Prices of oil, one of Canada's major exports, fell on
concerns that growing U.S. crude output could hamper an
Organization of the Petroleum Exporting Countries-led production
cut deal.             
    U.S. crude        prices settled down 56 cents at $48.22 a
barrel, while the Brent         global benchmark was off 10
cents at $51.66.
    Canadian wholesale trade unexpectedly soared by 3.3 percent
in January on stronger sales of motor vehicles and parts,
Statistics Canada data showed. In volume terms, wholesale trade
grew by 3.4 percent, which is likely to bolster overall economic
growth for the month.             
    The loonie rose 0.9 percent last week, helped by
stronger-than-expected domestic manufacturing data and the
prospect of Fed interest rate hikes proceeding at only a gradual
pace.    
    Speculators cut bullish bets on the Canadian dollar for the
second straight week, data from the Commodity Futures Trading
Commission and Reuters calculations showed on Friday. 
            
    Canadian government bond prices rose across the yield 
curve, with the two-year            up 2.5 Canadian cents to
yield 0.792 percent and the 10-year             rising 28
Canadian cents to yield 1.727 percent.
    The yields on both the 2-year and 10-year issues were their
lowest since March 7.
    Domestic retail sales data for January is due on Tuesday and
the Canadian government will release its federal budget on
Wednesday.                       

 (Additional reporting by Fergal Smith; Editing by Meredith
Mazzilli)
  
 

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