November 29, 2019 / 3:45 PM / 15 days ago

CANADA FX DEBT-Loonie adds to monthly decline as Canada's economy slows

    * Canadian dollar weakens against the greenback
    * Loonie is on track to fall 1% in November
    * Price of U.S. oil decreases by 2.8%
    * Bond prices trade mixed across the yield curve

    By Fergal Smith
    TORONTO, Nov 29 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Friday, adding to this month's
decline as investors worried about U.S.-China tensions and data
showed that Canada's economic growth slowed as expected in the
third quarter. 
    At 10:19 a.m. (1519 GMT), the Canadian dollar          was
trading 0.2% lower at 1.3300 to the greenback, or 75.19 U.S.
cents. The currency traded in a range of 1.3280 to 1.3314.
    The loonie was on track to fall 1% for the month, pressured
by a more dovish stance from the Bank of Canada.
    Ahead of the central bank's Dec. 4 interest rate decision,
official data showed that the Canadian economy expanded at an
annualized rate of 1.3% in the third quarter on higher business
investment and increased household spending. That was slower
than the 3.5% pace in the previous quarter but was close to
analysts' expectations.             
    "The headlines are bang on expectations but below the
surface there is plenty to be optimistic about," said Adam
Button, chief currency analyst at ForexLive. "If anything, the
GDP data makes it less likely that the Bank of Canada will cut
rates or signal that it will cut rates in the coming months."
    Chances of a rate cut in March dipped to 37% from 40% before
the data, the overnight index swaps market indicated.           
          
    U.S. stocks fell for the first time this week as trade
tensions resurfaced after China rebuked U.S. President Donald
Trump's decision to sign into law a bill backing protesters in
Hong Kong.             
    Canada is a major exporter of commodities, including oil, so
its economy could be hurt by prolonged trade uncertainty. U.S.
crude oil futures        were down 2.8% at $56.46 a barrel.
                
    Canadian government bond prices were mixed across the yield
curve, with the 10-year             falling 3 Canadian cents to
yield 1.471%.

 (Reporting by Fergal Smith
Editing by Marguerita Choy)
  
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