April 26, 2018 / 1:34 PM / 3 months ago

CANADA FX DEBT-C$ edges higher, boosted by higher oil prices

    * Canadian dollar at C$1.2831, or 77.94 U.S. cents
    * Price of oil rises 0.6 percent
    * Bond prices higher across the yield curve
    * 10-year yield touches highest intraday since Feb. 15

    TORONTO, April 26 (Reuters) - The Canadian dollar
strengthened slightly against its U.S. counterpart on Thursday
as oil prices climbed and domestic data showed rising employee
earnings.
    The price of oil, one of Canada's major exports, was
supported by expectations of renewed U.S. sanctions on Iran,
declining output in Venezuela and continuing strong demand.
            
    U.S. crude        prices were up 0.6 percent at $68.45 a
barrel.
    Canadian average weekly earnings of non-farm payroll
employees rose 3.4 percent in February from the same month last
year, led by the accommodations and food services sectors,
Statistic Canada said.
    Bank of Canada Governor Stephen Poloz has said that he
expects wages to pick up as job vacancies continue to grow and
for more people to be then encouraged to enter the workforce.
            
    On Wednesday, Poloz said the economy was "finally positive"
after a long adjustment to a sharp fall in oil prices, but he
added there was still softness in several areas of the country.
            
    At 9:04 a.m. EDT (1304 GMT), the Canadian dollar         
was trading 0.1 percent higher at 1.2831 to the greenback, or
77.94 U.S. cents.
    The currency traded in a narrow range of C$1.2823 to
C$1.2864. On Wednesday, the loonie touched C$1.2897, its weakest
in more than three weeks.   
    Modest gains for the loonie came amid signs of progress on a
deal to revamp the North American Free Trade Agreement, which
could benefit Canada's economy because of the high proportion of
the country's exports that go to the United States.
    Canadian Foreign Minister Chrystia Freeland said on
Wednesday that good progress has been made at the NAFTA trade
talks on the key issue of auto rules, though the threat of
proposed U.S. steel and aluminum tariffs coming into force next
week clouded the mood.             
    Canadian government bond prices were higher across the yield
curve in sympathy with U.S. Treasuries as data showed a drop in
U.S. domestic core capital good orders in March.
    The two-year            rose 4.3 Canadian cents in price to
yield 1.909 percent and the 10-year             climbed 27.3
Canadian cents to yield 2.356 percent.
    Still, the 10-year yield touched its highest intraday since
Feb. 15 at 2.379 percent.

 (Reporting by Fergal Smith; Editing by Steve Orlofsky)
  
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