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Fergal Smith

CANADA FX DEBT-C$ pulls back from 5-month high ahead of key jobs data

12:38am IST

(Adds dealer quotes and details throughout, updates prices) * Canadian dollar dips 0.2% against the greenback * Price of U.S. oil declines 0.6% * Toronto-area housing sales volumes rise 29.5% year-over-year * Canadian bond yields fall across a flatter curve By Fergal Smith TORONTO, Aug 6 The Canadian dollar weakened against the greenback on Thursday as oil prices fell and investors awaited U.S. and domestic jobs data, with the currency retreating from a five-month high reached the day before. The loonie was trading 0.2% lower at 1.3290 to the greenback, or 75.24 U.S. cents. The currency, which on Wednesday notched its strongest intraday level since Feb. 21 at 1.3229, traded in a range of 1.3243 to 1.3322. "Everybody is waiting for the double payroll numbers tomorrow morning," said Simon Côté, managing director, risk management solutions at National Bank Financial. Canada's employment report for July is due on Friday. The data could offer additional evidence of economic recovery from the coronavirus crisis after nearly one million jobs were added in June. Data on Thursday showed that housing sales volumes in the area of Toronto, Canada's most populous city, soared to a monthly record in July. Sales were up 29.5% compared to the same month in 2019. With the domestic economy showing signs of healing and commodity prices moving higher, strategists are raising their forecasts for the Canadian dollar, a Reuters poll showed. The currency has rallied more than 10% since March, helped by recent weakness for the U.S. dollar against a basket of major currencies. "We are reaching levels that are putting the long-term bullish trend of the U.S. dollar under pressure," Côté said. Data showing fewer Americans sought jobless benefits last week helped stabilize the U.S. dollar on Thursday but U.S. crude oil futures were weighed by bearish sentiment about fuel demand, settling 0.6% lower. Oil is one of Canada's major exports. Canadian government bond yields were lower across a flatter curve, with the 10-year down 4 basis points at 0.463%. Last Friday, it hit its lowest intraday level in nearly five months at 0.412%. (Reporting by Fergal Smith; Editing by Steve Orlofsky and Nick Zieminski)

POLL-Canadian dollar forecasts shift higher as commodity markets rally

06 Aug 2020

* reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/fx-polls?RIC=CAD= poll data

CANADA FX DEBT-C$ notches a 5-month high along with higher oil prices

06 Aug 2020

(Adds analyst quote and details throughout, updates prices) * Canadian dollar rises 0.3% against the greenback * Loonie touches its strongest level since Feb. 21 at 1.3230 * Canada's trade deficit widens to C$3.19 billion in June * Canadian bond yields rise across a steeper curve By Fergal Smith TORONTO, Aug 5 The Canadian dollar climbed to its highest in more than five months against its broadly weaker U.S. counterpart on Wednesday as oil prices rose, but some gains for the loonie were given back after domestic data showing a wider trade deficit. The loonie was trading 0.3% higher at 1.3280 to the greenback, or 75.30 U.S. cents. The currency touched its strongest intraday level since Feb. 21 at 1.3230. "Oil prices, along with the direction of the greenback will continue to influence the CAD going forward," analysts at Action Economics, including Ron Simpson, said in web-based commentary. The price of oil, one of Canada's major exports, rose to its highest since early March after a large decline in U.S. crude inventories. U.S. crude oil futures settled 1.2% higher at $42.19 a barrel, while the U.S. dollar extended its recent decline against a basket of major currencies as investors' appetite for risk improved on strong corporate earnings and expectations of more stimulus measures for the pandemic-ravaged global economy. Canada's trade deficit unexpectedly ballooned to C$3.19 billion in June on a surge in motor vehicle and parts imports as the economy started to reopen, Statistics Canada data indicated. Analysts had forecast a deficit of C$0.90 billion. Canadian government bond yields were higher across a steeper curve, with the 10-year up 6.2 basis points at 0.497%. Last Friday, it hit its lowest intraday level in nearly five months at 0.412%. Canada's employment report for July is due on Friday. It could offer additional evidence of economic recovery after nearly 1 million jobs were added in June. (Reporting by Fergal Smith; editing by Jonathan Oatis)

CANADA FX DEBT-C$ strengthens as commodity investors bet on U.S. stimulus

05 Aug 2020

(Adds analyst quotes and details throughout; updates prices) * Canadian dollar rises 0.3% against greenback * Price of U.S. oil settles up 1.7% * Loonie touches strongest level in five days at 1.3342 * Canadian bond yields ease across much of a flatter curve By Fergal Smith TORONTO, Aug 4 The Canadian dollar rose to a five-day high against its U.S. counterpart on Tuesday as the prospect of more U.S. economic stimulus boosted oil prices and data showed expansion in Canada's manufacturing sector for the first time in five months. The loonie was trading 0.3% higher at 1.3354 to the greenback, or 74.88 U.S. cents. The currency touched its strongest intraday level since last Thursday at 1.3342. "All commodities are rallying and the Canadian dollar can't help but follow along with that," said Adam Button, chief currency analyst at ForexLive. Canada is a major producer of commodities, including gold , which notched a record high above $2,000 an ounce, and oil. U.S. crude oil futures settled 1.7% higher at $41.70 a barrel, supported by hopes the White House and lawmakers in the U.S. Congress are getting closer to a deal on a new economic stimulus package and signs America is making progress in curbing the spread of the novel coronavirus. "The commodity market is signaling a lot of optimism," Button said. The IHS Markit Canada Manufacturing Purchasing Managers' index (PMI) rose to a seasonally adjusted 52.9 in July from 47.8 in June. It was the first time since February that the index was above the 50 threshold, indicating expansion in the sector, and the highest reading since January 2019. Canada's jobs report for July is due on Friday. The loonie has rallied nearly 10% since March. Its advance on Tuesday came as the U.S. dollar , which had its worst month in a decade in July, lost ground against a basket of major currencies. Canadian government bond yields eased across much of a flatter curve on Tuesday, with the 10-year down 3 basis points at 0.438%. On Friday, it touched its lowest intraday level since March 9 at 0.412%. (Reporting by Fergal Smith Editing by Nick Zieminski and Paul Simao)

CANADA FX DEBT-C$ ends July higher to notch best win streak in six years

01 Aug 2020

(Adds strategist quotes and details throughout; updates prices) * Canadian dollar gains 0.3% against the greenback * For the month, the loonie is up 1.5% * Canadian GDP rises 4.5% in May * Canadian bond yields rise across the curve By Fergal Smith TORONTO, July 31 The Canadian dollar strengthened against its U.S. counterpart on Friday to notch its fourth straight monthly gain, its longest winning run in six years, as domestic data showed the economy expanded more than expected in May. The gain for the loonie on Friday follows a decline in recent days. As the end of the month approaches, some market players tend to rebalance their currency hedges. "As the month-end passed in London for the big global investors ... then I think the market said upward pressure in USD-CAD is off, back to where we were, which is down below 1.34," said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets. "I think we'll see more of that next week." The loonie has benefited in July from a weakening of the U.S. dollar, as coronavirus cases climbed in the United States, and from higher prices for oil, one of Canada's major exports. On Friday, the loonie was trading 0.3% higher at 1.3377 to the greenback, or 74.76 U.S. cents, taking its gain for the month to 1.5%. The monthly winning streak, which followed a sharp decline in March when financial markets were pummeled by the coronavirus crisis, was the currency's longest since 2014. Canadian gross domestic product rose by 4.5% in May, and a preliminary flash estimate sees a further 5% increase in June as the economy reopens following COVID-19 lockdowns, Statistics Canada said. Economists had expected a 3.5% gain for May GDP. U.S. crude oil futures settled 0.9% higher at $40.27 a barrel, benefiting from news that U.S. oil output cuts in May were the largest on record. Canadian government bond yields were higher across the curve, with the 10-year yield up 2.1 basis points at 0.468%. Canadian financial markets will be closed on Monday for a civic holiday. (Reporting by Fergal Smith; editing by Jonathan Oatis and Kevin Liffey)

REFILE-CANADA FX DEBT-Canadian dollar slides to 1-week low, weighed by lower oil prices

31 Jul 2020

(Removes extraneous word 'because' in fourth paragraph) * Canadian dollar falls 0.8% against the greenback * Loonie touches its weakest since July 22 at 1.3459 * Canada's 10-year yield hits its lowest level since May 15 By Fergal Smith TORONTO, July 30 The commodity-linked Canadian dollar fell to a one-week low against its U.S. counterpart on Thursday as a drop in oil prices offset broad-based weakness for the greenback. The loonie was trading 0.8% lower at 1.3441 to the greenback, or 74.40 U.S. cents. The currency touched its weakest intraday level since July 22 at 1.3459. The U.S. dollar fell against a basket of major currencies after U.S. President Donald Trump raised the possibility of delaying the nation's Nov. 3 presidential election, and it is on track for its worst monthly performance in a decade as the spread of the coronavirus continues to weigh on the U.S. economy. The loonie was unable to take advantage of a weaker greenback because of the slide in oil prices, said Tony Valente, a senior FX dealer at AscendantFX. U.S. crude prices settled 3.3% lower at $39.92 a barrel as U.S. political uncertainty and data showing the U.S. economy suffered its steepest contraction since the Great Depression weighed. Oil is one of Canada's major exports. Trump has approved the existing Keystone pipeline to ship 29% more Canadian crude into the U.S. Midwest and Gulf Coast after TC Energy Corp's decade-old expansion project was stalled again this month by legal hurdles. Easing of COVID-19 restrictions are not yet reflected in May payroll employment, with the number of Canadians receiving pay from their employer falling by 4.1%, data from Statistics Canada showed. Canada's GDP report for May is due on Friday. It is expected to show some economic recovery after a sharp contraction in April. Canadian government bond yields were lower across the curve in sympathy with U.S. Treasuries on Thursday. The 10-year fell 3.1 basis points to 0.448%, which was about its lowest since May 15. (Reporting by Fergal Smith Editing by Alistair Bell and Jonathan Oatis)

CANADA FX DEBT-Canadian dollar slides to 1-week low, weighed by lower oil prices

31 Jul 2020

(Adds dealer comment and details throughout, updates prices) * Canadian dollar falls 0.8% against the greenback * Loonie touches its weakest since July 22 at 1.3459 * Canada's 10-year yield hits its lowest level since May 15 By Fergal Smith TORONTO, July 30 The commodity-linked Canadian dollar fell to a one-week low against its U.S. counterpart on Thursday as a drop in oil prices offset broad-based weakness for the greenback. The loonie was trading 0.8% lower at 1.3441 to the greenback, or 74.40 U.S. cents. The currency touched its weakest intraday level since July 22 at 1.3459. The U.S. dollar fell against a basket of major currencies after U.S. President Donald Trump raised the possibility of delaying the nation's Nov. 3 presidential election, and it is on track for its worst monthly performance in a decade as the spread of the coronavirus continues to weigh on the U.S. economy. The loonie was unable to take advantage because of a weaker greenback because of the slide in oil prices, said Tony Valente, a senior FX dealer at AscendantFX. U.S. crude prices settled 3.3% lower at $39.92 a barrel as U.S. political uncertainty and data showing the U.S. economy suffered its steepest contraction since the Great Depression weighed. Oil is one of Canada's major exports. Trump has approved the existing Keystone pipeline to ship 29% more Canadian crude into the U.S. Midwest and Gulf Coast after TC Energy Corp's decade-old expansion project was stalled again this month by legal hurdles. Easing of COVID-19 restrictions are not yet reflected in May payroll employment, with the number of Canadians receiving pay from their employer falling by 4.1%, data from Statistics Canada showed. Canada's GDP report for May is due on Friday. It is expected to show some economic recovery after a sharp contraction in April. Canadian government bond yields were lower across the curve in sympathy with U.S. Treasuries on Thursday. The 10-year fell 3.1 basis points to 0.448%, which was about its lowest since May 15. (Reporting by Fergal Smith Editing by Alistair Bell and Jonathan Oatis)

CANADA FX DEBT-C$ gains as investors sell greenbacks on 'downbeat' Fed

30 Jul 2020

(Adds dealer quotes and details throughout; updates prices) * Canadian dollar rises 0.2% against the greenback * Loonie trades in a range of 1.3333 to 1.3387 * Price of U.S. oil increases 0.6% * Canadian bond yields move higher across the curve By Fergal Smith TORONTO, July 29 The Canadian dollar rose against its U.S. counterpart on Wednesday as the Federal Reserve's dovish stance weighed broadly on the greenback and the Ontario government paved the way for most businesses in Canada's most populous city to reopen. The U.S. dollar fell to a two-year low as the Fed repeated a pledge to use its "full range of tools" to support the economy for as long as it takes to recover from fallout of the COVID-19 pandemic. "The market's immediate response to a downbeat and cautious Federal Reserve policy announcement was to continue selling U.S. dollars versus major currencies," said Michael Goshko, corporate risk manager at Western Union Business Solutions. Higher prices for oil, one of Canada's major exports, added to support for the loonie. U.S. crude oil futures settled up 0.6% at $41.27 a barrel after a steep drop in U.S. crude inventories, but another record day for coronavirus cases worldwide kept gains in check. The Canadian dollar was trading 0.2% higher at 1.3344 to the U.S. dollar, or 74.94 U.S. cents. The currency, which on Tuesday touched its strongest intraday level in nearly seven weeks at 1.3327, traded in a range of 1.3333 to 1.3387. Toronto will move into the third stage of its economic reopening on Friday, the Ontario provincial government announced, after a four-month lockdown. Canada's GDP report for May is due on Friday. It is expected to show some recovery in the economy after a sharp contraction in April. Canadian government bond yields were higher across the curve on Wednesday, with the 10-year up more than one basis point at 0.489%. On Tuesday, it hit its lowest intraday level since June 15 at 0.472%. (Reporting by Fergal Smith; editing by Jonathan Oatis and Tom Brown)

CANADA FX DEBT-Loonie firms as 'weak USD tone' persists ahead of Fed decision

29 Jul 2020

* Canadian dollar rises 0.1% against the greenback * Loonie trades in a range of 1.3340 to 1.3387 * Price of U.S. oil increases 0.7% * Canadian bond yields move higher across the curve By Fergal Smith TORONTO, July 29 The Canadian dollar edged higher against its U.S. counterpart on Wednesday as oil prices climbed and rising coronavirus cases in the United States weighed on the greenback, with the focus turning to a Federal Reserve policy announcement. The loonie was trading 0.1% higher at 1.3363 to the U.S. dollar, or 74.83 U.S. cents. The currency, which on Tuesday touched its strongest intraday level in nearly seven weeks at 1.3327, traded in a range of 1.3340 to 1.3387. "Support for the USD has been relatively firm in the low 1.33 range in the past week but the downside retains a vulnerable look given the weak USD tone generally," strategists at Scotiabank, including Shaun Osborne, said in a note. The U.S. dollar fell to a two-year low against a basket of major currencies on Wednesday as pressure built on the Fed to strike a dovish policy stance at its interest rate announcement later in the day amid record increases in COVID-19 infections in some U.S. states. The price of oil, one of Canada's major exports, rose after a surprise drop in U.S. crude inventories, but demand concerns due to rising COVID-19 infections capped gains. U.S. crude prices were up 0.7% at $41.31 a barrel. Canada's GDP report for May is due on Friday. It is expected to show some recovery in the economy after a sharp contraction in April. Canadian government bond yields were higher across the curve on Wednesday, with the 10-year up by half of a basis point at 0.481%. On Tuesday, it hit its lowest intraday level since June 15 at 0.472%. (Reporting by Fergal Smith; editing by Jonathan Oatis)

CANADA FX DEBT-Canadian dollar's advance stalls as oil prices decline

29 Jul 2020

(Adds strategist quotes and details throughout; updates prices) * Canadian dollar trades near flat against the greenback * Loonie touches its strongest intraday since June 10 at 1.3331 * Price of U.S. oil declines 1.4% * Canada's 10-year yield eases 4.8 basis points to 0.475% By Fergal Smith TORONTO, July 28 The Canadian dollar was little changed against its U.S. counterpart on Tuesday, pulling back from an earlier near seven-week high as oil prices fell and data showed climbing domestic coronavirus infections. Canada's chief public health officer warned that Canadians could face tighter health restrictions again as COVID-19 case numbers creep higher, particularly in the West. Canada's seven-day rolling average of newly reported cases has ticked up again after falling to a low in early July. The price of oil, one of Canada's major exports, fell as U.S. lawmakers prepared to wrangle over an economic stimulus package and investors worried about a rise in coronavirus cases worldwide. U.S. crude oil futures settled 1.4% lower at $41.04 a barrel The U.S. dollar index bounced off a two-year low, but looked primed for further weakness as the United States continued to see a rise in coronavirus cases, while the Federal Reserve is expected to maintain very loose monetary policies. "Most of the gains over the last month for Canada has been due to U.S. dollar weakness," said Mark Chandler, head of Canadian fixed income and currency strategy at RBC Capital Markets. "The U.S. struggles with COVID has helped us (the Canadian dollar) on a relative basis." The loonie was trading nearly unchanged at 1.3360 to the U.S. dollar, or 74.85 U.S. cents. The currency, which has benefited in recent weeks from signs of global economic recovery, touched its strongest intraday level since June 10 at 1.3331. Canadian government bond yields were lower across much of a flatter curve along with lower Treasury yields. The 10-year was down 4.8 basis points at 0.475%. Canada's GDP report for May is due on Friday. It is expected to show some recovery in the economy after a sharp contraction in April. (Reporting by Fergal Smith; Editing by Andrea Ricci and Grant McCool)

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