June 8, 2020 / 8:23 PM / a month ago

CANADA FX DEBT-Loonie climbs to 3-month high as investors cheer economic reopening

 (Adds strategist quotes and details throughout; updates prices)
    * Canadian dollar rises 0.5% against the greenback
    * Loonie touches its strongest since March 4 at 1.3356
    * Canadian housing starts rise to 193,453 units in May 
    * Canadian bond yields were mixed across a flatter curve

    By Fergal Smith
    TORONTO, June 8 (Reuters) - The Canadian dollar strengthened
to a three-month high against its U.S. counterpart on Monday as
hopes of a quick economic rebound from the coronavirus crisis
overshadowed lower oil prices.    
    U.S. stocks rose, with the Nasdaq hitting a new record close
after a surprisingly upbeat jobs report last week raised
expectations of a swift recovery from a coronavirus-driven
downturn.             
    Canada, which also reported surprisingly strong jobs data
last week             , is a major producer of commodities,
including oil, so the loonie tends to benefit from a brighter
outlook for the global economy.
    "The reopening trade is in full flight globally," said Adam
Button, chief currency analyst at ForexLive. "Ontario added its
name to the list today."
    Ontario, Canada's most populous province, will reopen some
hair salons and outdoor dining at restaurants, among other
businesses, on Friday, the provincial government announced, but
only in health regions where the spread of COVID-19 is under
better control.             
    The Canadian dollar        was trading 0.5% higher at 1.3361
to the greenback, or 74.84 U.S. cents. The currency touched its
strongest intraday level since March 4 at 1.3356.
    Speculators have pared their bearish bets on the loonie for
a second straight week, data from the U.S. Commodity Futures
Trading Commission showed on Friday.             
    Canadian housing starts rose to a seasonally adjusted annual
rate of 193,453 units in May from 166,477 units in April, the
Canadian Mortgage and Housing Corporation said on Monday.
            
    U.S. crude futures        settled 3.4% lower at $38.19 a
barrel after Saudi Arabia said an extension of output cuts by
OPEC+ nations would not include extra voluntary cuts by a trio
of Gulf producers.             
    Canadian government bond yields were mixed across a flatter
curve, with the 10-year yield             down 4.8 basis points
at 0.685%. On Friday, it touched its highest intraday level
since mid-April at 0.768%.

 (Reporting by Fergal Smith
Editing by Marguerita Choy and Jonathan Oatis)
  
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