April 30, 2019 / 1:37 PM / 6 months ago

CANADA FX DEBT-C$ retreats from six-day high as domestic economy shrinks

    * Canadian dollar rises 0.1% against the greenback
    * Canada's economy shrinks 0.1% in February
    * Price of U.S. oil increases 1.4%
    * Canada's 10-year yield touches a one-week high at 1.745%

    TORONTO, April 30 (Reuters) - The Canadian dollar
strengthened against its U.S. counterpart on Tuesday, but was
trading below an earlier six-day high as data showing a surprise
contraction in the domestic economy offset higher oil prices and
broad weakening of the greenback.
    The Canadian economy shrank by 0.1% in February, pulled down
in part by weakness in the mining sector and bad weather that
hurt rail transport, Statistics Canada data indicated. Analysts
in a Reuters poll had expected no change from January, when the
economy grew by 0.3%.             
    The price of oil, one of Canada's major exports, rose as
Venezuela's opposition leader called on the military to back him
to end Nicolas Maduro's rule and after Saudi Arabia said a deal
between producers to curb output could be extended beyond June
to the end of 2019.             
    U.S. crude oil futures        were up 1.4% at $64.41 a
barrel.
    The U.S. dollar        fell against a basket of major
currencies as data showing stronger-than-expected first quarter
growth numbers for the euro zone boosted the euro.             
    At 9:17 a.m. (1317 GMT), the Canadian dollar          was
trading 0.1% higher at 1.3446 to the greenback, or 74.37 U.S.
cents. The currency touched its strongest intraday since last
Wednesday at 1.3426.
    Bank of Canada Governor Stephen Poloz and Senior Deputy
Governor Carolyn Wilkins will testify to the House of Commons
finance committee at 11:00 a.m. (1500 GMT).
    Canadian government bond prices were lower across much of
the yield curve, with the two-year            down 1.5 Canadian
cents to yield 1.571% and the 10-year             falling 12
Canadian cents to yield 1.735%.
    The 10-year yield touched its highest level intraday since
April 23 at 1.745%.

 (Reporting by Fergal Smith; editing by Jonathan Oatis)
  
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