October 3, 2019 / 7:57 PM / 2 months ago

CANADA FX DEBT-C$ holds near 1-month low as investors worry about U.S. slowdown

 (Adds strategist quotes and details, updates prices)
    * Canadian dollar trades near flat against greenback
    * Loonie touches weakest intraday since Sept. 3 at 1.3348
    * Price of U.S. oil decreases 0.4%
    * Canada's 10-year yield hits a four-week low at 1.236%.

    By Fergal Smith
    TORONTO, Oct 3 (Reuters) - The Canadian dollar was little
changed against the greenback on Thursday, hovering near an
earlier one-month low, as data showing weaker U.S. services
sector activity supported bets for Federal Reserve interest rate
cuts.
    At 3:23 p.m. (1923 GMT), the Canadian dollar          was
trading nearly unchanged at 1.3335 to the greenback, or 74.99
U.S. cents. The currency, which fell on Wednesday by the most in
seven months, touched its weakest intraday level since Sept. 3
at 1.3348.
    The U.S. data "helped pull CAD off its lows but with very
little conviction," said Shaun Osborne, chief currency
strategist at Scotiabank.
    "When you talk to people out there at the moment I think
most people feel that things could move either way in the blink
of an eye," Osborne said.
    The U.S. dollar        declined against a basket of major
currencies as investors fretted about a slowdown in the world's
largest economy.                            
    Investors were also worried about the potential for a
tit-for-tat transatlantic trade war.             
    Canada exports many commodities, including oil, so its
economy could be hurt by a weaker outlook for global trade.
    U.S. crude oil futures        fell 0.4% to $52.45 a barrel,
pressured by concerns about global economic growth, oil demand
and signs of excess supply despite OPEC-led cuts.               
 
    Canada's trade report for August is due on Friday, which
could help guide expectations for the Bank of Canada's interest
rate outlook.
    The central bank has worried that trade uncertainty,
including the dispute between the United States and China, is
weighing more heavily on the global economy, but has showed no
appetite for cutting interest rates amid steady domestic
activity.
    Canadian government bond prices were higher across the yield
curve, with the two-year            up 13 Canadian cents to
yield 1.416% and the 10-year             rising 59 Canadian
cents to yield 1.244%.
    The 10-year yield touched its lowest intraday level since
Sept. 5 at 1.236%.

 (Reporting by Fergal Smith; Editing by Bernadette Baum and Tom
Brown)
  
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