June 14, 2019 / 7:19 PM / 5 days ago

CANADA FX DEBT-Loonie hits 8-day low as U.S. data boosts greenback

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    * Canadian dollar falls 0.6% against the greenback
    * Loonie touches its weakest level since June 6 at 1.3424
    * Canadian dollar declines 1.1% for the week
    * Canadian bond prices edge higher across much of the yield
curve

    By Fergal Smith
    TORONTO, June 14 (Reuters) - The Canadian dollar fell to a
one-week low against its U.S. counterpart on Friday as U.S. data
suggesting a pick-up in consumer spending boosted the greenback.
    The U.S. dollar        rose against a basket of major
currencies after encouraging U.S. retail sales data for May
eased fears that the U.S. economy is slowing sharply, ahead of
the Federal Reserve's meeting next week.             
    "It's a U.S. dollar move across the board ... the buying
started right after that data came out," said Brad Schruder,
director of corporate sales and structuring at BMO Capital
Markets. 
    "I think what this is providing is an opportunity for
Canadian companies that did not hedge some U.S. dollar cash
flows a few weeks ago, when we were trading at about 1.3550, to
step in here because the narrative is shifting around the
Federal Reserve," Schruder said.
    The Canadian dollar could benefit if the Bank of Canada cuts
interest rates less than the Federal Reserve. Money markets see
about a 70% chance of a Bank of Canada rate cut by December,
while they are pricing in at least two cuts over the same period
by the Fed.                      
    At 2:50 p.m. (1850 GMT), the Canadian dollar          was
trading 0.6% lower at 1.3413 to the greenback, or 74.55 U.S.
cents, its biggest decline since March 6.
    The currency, which fell 1.1% for the week, touched its
weakest level since June 6 at 1.3424.
    The decline for the loonie came as global stocks         
were pressured by more signs of slowdown in Chinese industry and
as the long-feared hit to global growth from U.S. President
Donald Trump's trade war crystallized in slashed sales forecast
from chipmaker Broadcom.             
    Canada runs a current account deficit and exports many
commodities, including oil, so its economy could be hurt if a
trade war between the United States and China slows the global
flow of trade or capital.
    Oil rose, paring this week's decline, after attacks on two
oil tankers in the Gulf of Oman this week raised concerns about
potential supply disruptions. U.S. crude oil futures       
settled 0.4% higher at %52.51 a barrel.                 
    Canadian government bond prices were slightly higher across
much of the yield curve, with the two-year            up 0.5
Canadian cent to yield 1.385% and the 10-year             rising
5 Canadian cents to yield 1.445%.

 (Reporting by Fergal Smith
Editing by Nick Zieminski and Sandra Maler)
  
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