Edition:
India

Fergal Smith

CANADA FX DEBT-Canadian dollar hits 6-week low as rate cut bets nudge higher

2:01am IST

(Adds strategist quote and details throughout, updates prices) * Canadian dollar weakens 0.4% against the greenback * Loonie touches its weakest level since Oct. 11 at 1.3272 * Price of U.S. oil decreases by 3.2% * Canadian factory sales fall 0.2% in September By Fergal Smith TORONTO, Nov 19 The Canadian dollar weakened to a near six-week low against its U.S. counterpart on Tuesday after a speech by a senior Bank of Canada official supported the view that the central bank is moving closer to an interest rate cut. Canada's financial system is in a relatively good place to weather any potential storms generated by a weakening global economy and the trade war between the United States and China, Bank of Canada Senior Deputy Governor Carolyn Wilkins said. "The open-ended tone of Wilkins' remarks arguably pushed the Bank slightly closer to the easing posture that's been adopted by other key central banks in recent months," Don Curren, a market strategist at Cambridge Global Payments, said in a note. Chances of a Bank of Canada interest rate cut as soon as March rose to 64% from less than 60% before Wilkins' speech, data from the overnight index swaps market showed. In October, Canada's central bank shifted to a more dovish stance as it cut its economic growth forecasts and expressed concern about global trade uncertainty. At 3:07 p.m. (2007 GMT), the Canadian dollar was trading 0.4% lower at 1.3264 to the greenback, or 75.39 U.S. cents. The currency touched its weakest intraday level since Oct. 11 at 1.3272. The decline for the loonie came as thousands of workers at Canada's largest railway went on strike for the first time in a decade, disrupting the shipping of commodities, and domestic data showed monthly declines for factory sales and home prices. Canadian factory sales decreased by 0.2% in September, hampered by partial shutdowns for maintenance at some refineries, data from Statistics Canada showed. The Teranet-National Bank Composite House Price Index fell 0.1% in October, weighed by seasonal pressures. Adding to headwinds for the loonie was a sharp drop in the price of oil, one of Canada's major exports. U.S. crude oil futures settled 3.2% lower at $55.21 a barrel. Canadian government bond prices were higher across the yield curve, with the two-year up 4.5 Canadian cents to yield 1.517% and the 10-year rising 33 Canadian cents to yield 1.451%. The gap between Canada's 2-year yield and its U.S. counterpart widened by 2.9 basis points to a spread of 8.1 basis points in favor of the U.S. bond. Canada's inflation report for October is due on Wednesday, while Bank of Canada Governor Stephen Poloz is due to speak on Thursday on economic change. (Reporting by Fergal Smith; Editing by Bernadette Baum and Peter Cooney)

CANADA FX DEBT-C$ posts 10-day high as investors weigh content of Trump-Powell meeting

19 Nov 2019

(Adds strategist quotes and details throughout; updates prices) * Canadian dollar rises 0.1% against the greenback * Loonie touches a 10-day high at 1.3200 * Price of U.S. oil declines 1.2% * Canada-U.S. 10-year spread narrows by 2.5 basis points By Fergal Smith TORONTO, Nov 18 The Canadian dollar rose to a 10-day high against the greenback on Monday as investors bet that a meeting between U.S. President Donald Trump and Federal Reserve Chair Jerome Powell could increase prospects for U.S. interest rate cuts. At 4:25 p.m. (2125 GMT), the Canadian dollar was trading 0.1% higher at 1.3205 to the greenback, or 75.73 U.S. cents. The currency touched its strongest intraday level since Nov. 8 at 1.3200. "There are all kinds of rumors flying about the unscheduled meeting between Powell and Trump," said Adam Button, chief currency analyst at ForexLive. "Virtually any way you look at that meeting, it's dovish and a negative for the U.S. dollar." While the Fed sets policy independent of the White House, investors worried that Trump either urged Powell to cut interest rates further or told Powell something, such as information on U.S. trade talks with China, that could make Powell think about easing, Button said. The Fed said the two met on Monday morning "to discuss the economy, growth, employment and inflation." Trump has frequently criticized the Fed for setting interest rates too high. The U.S. central bank has cut rates three times this year - in part to offset what it views as damage done by the Trump administration's trade war with China. The U.S. dollar fell against a basket of major currencies and U.S. Treasury yields declined. Uncertainty over a U.S-China trade deal weighed on the price of oil, one of Canada's major exports. U.S. crude oil futures settled 1.2% lower at $57.05 a barrel. Canada's inflation report for October is due on Wednesday and September retail sales data is due on Friday, both of which could help guide expectations for Bank of Canada interest rate cuts. Bank of Canada Senior Deputy Governor Carolyn Wilkins will speak on Tuesday on safeguarding the Canadian financial system, while Governor Stephen Poloz is due to speak on Thursday on economic change. Money markets see chances of the central bank cutting interest rates next month at less than 20%. Canada's 10-year bond declined 3 Canadian cents to yield 1.485%. The gap between the 10-year yield and its U.S. equivalent narrowed by 2.5 basis points to a spread of 32.7 basis points in favor of the U.S. bond. (Reporting by Fergal Smith; Editing by Nick Zieminski and Peter Cooney)

CANADA FX DEBT-Loonie recovers from one-month low as risk appetite climbs

16 Nov 2019

(Adds strategist quotes and details throughout; updates prices) * Canadian dollar rises 0.2% against the greenback * For the week, the loonie was nearly unchanged * Price of U.S. oil increases 1.7% * Canadian bond prices fall across the yield curve By Fergal Smith TORONTO, Nov 15 The Canadian dollar strengthened against its U.S. counterpart on Friday, lagging behind some other commodity-linked currencies but recovering from a one-month low the day before as investors grew more hopeful about a U.S.-China trade deal. At 3:18 p.m. (2018 GMT), the Canadian dollar was trading 0.2% higher at 1.3226 to the greenback, or 75.61 U.S. cents. The currency, which hit a one-month low at 1.3270 on Thursday, traded in a range of 1.3217 to 1.3252. For the week, the loonie was nearly unchanged. Wall Street's main stock indexes hit record highs after White House economic adviser Larry Kudlow said on Thursday that the United States and China were nearing a deal. Canada is a major exporter of commodities, including oil, so its economy could benefit from an improved global trade outlook. U.S. crude oil futures settled 1.7% higher at $57.72 a barrel. There is "a bit more of a pro-risk bias in the markets that has lifted the commodity currencies generally but CAD has been left behind in that move," said Shaun Osborne, chief currency strategist at Scotiabank. Commodity-linked currencies, such as the Australian dollar and the New Zealand dollar posted stronger gains than the loonie, up 0.4% and 0.3% respectively. "We are pretty much in a holding pattern here around about 1.3250 (in USD-CAD) until we get some more information and we should get some more information next week," Osborne said. Canada's inflation report for October is due next Wednesday and September retail sales data is due next Friday, both of which could help guide expectations for Bank of Canada interest rate cuts. Bank of Canada Governor Stephen Poloz is due to speak next Thursday. The loonie has declined as much as 1.5% since Oct. 30, when the central bank left the door open to a possible interest rate cut over the coming months to help the economy weather trade uncertainty. Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries as increased risk appetite reduced demand for government bonds. The 10-year fell 21 Canadian cents to yield 1.487%. On Thursday, the 10-year yield touched its lowest intraday level since Nov. 4 at 1.464%. Foreign investors bought a net C$4.76 billion in Canadian securities in September, Statistics Canada said on Friday. Separate data from the Canadian Real Estate Association showed homes sales held steady in October. (Reporting by Fergal Smith Editing by Nick Zieminski and Tom Brown)

CANADA FX DEBT-Canadian dollar holds near 1-month low ahead of Poloz speech

15 Nov 2019

(Adds strategist quotes and details throughout, updates prices) * Loonie touches its weakest since Oct. 11 at 1.3270 * Canada's new housing price index rises 0.2% in September * Canada's 10-year yield hits a 10-day low at 1.465% By Fergal Smith TORONTO, Nov 14 The Canadian dollar was little changed against its U.S. counterpart on Thursday, holding near an earlier one-month low as a speech by Bank of Canada Governor Stephen Poloz loomed and investors grew more nervous about a global economic slowdown. World stocks fell as Chinese economic data slowed in October and Germany only narrowly avoided a recession in the third quarter, adding to worries about the global growth fallout from the U.S.-China trade war. Canada is a major exporter of commodities, including oil, so its economy could be hurt by a slowdown in global growth. "It certainly feels like a combination of macro risks and concerns that are weighing on the Canadian dollar," said Bipan Rai, North America head, FX strategy at CIBC Capital Markets. "As long you have that trade-related uncertainty, there is going to be some uncertainty with respect to the Canadian dollar." Last month, the Bank of Canada expressed concern about global trade uncertainty as it cut its growth forecasts and left its benchmark interest rate on hold at 1.75%. Poloz is due to speak on the fourth industrial revolution at the Federal Reserve Bank of San Francisco on Thursday night. Canada's central bank will publish the governor's text at 9:45 p.m. EST (0245 GMT Friday). Money markets see chances of an interest rate cut next month at about 20%. At 3:41 p.m. (2041 GMT), the Canadian dollar was trading nearly unchanged at 1.3249 to the greenback, or 75.48 U.S. cents. The currency hit its weakest intraday level since Oct. 11 at 1.3270. U.S. crude oil futures settled 0.6% lower at $56.77 a barrel, pressured by a build in domestic inventories and record production. Canada's new housing price index rose 0.2% in September, the largest increase in two years, data from Statistics Canada showed. Canadian government bond prices were higher across a flatter yield curve in sympathy with U.S. Treasuries. The two-year rose 8 Canadian cents to yield 1.534% and the 10-year was up 72 Canadian cents to yield 1.473%. The 10-year yield touched its lowest intraday level since Nov. 4 at 1.465%. (Reporting by Fergal Smith; Editing by Jonathan Oatis and Peter Cooney)

CANADA FX DEBT-Canadian dollar hits 1-month low, pares decline ahead of Poloz speech

14 Nov 2019

(Adds strategist quotes and details throughout; updates prices) * Canadian dollar falls 0.1% against the greenback * Loonie hits its weakest since Oct. 11 at 1.3268 * Price of U.S. oil increases 0.6% * Canadian bond prices rise across a flatter yield curve By Fergal Smith TORONTO, Nov 13 The Canadian dollar weakened to a one-month low against its U.S. counterpart on Wednesday, but the currency's decline lost some momentum as investors turned attention to a speech by Bank of Canada Governor Stephen Poloz on Thursday. At 3:40 p.m. (2040 GMT), the Canadian dollar was trading 0.1% lower at 1.3251 to the greenback, or 75.47 U.S. cents. The currency's strongest level of the session was 1.3230, while it touched its weakest since Oct. 11 at 1.3268. The loonie has declined by as much as 1.5% since Oct. 30, when the Bank of Canada shifted to a more dovish stance by cutting its economic growth forecasts and expressing concern about global trade uncertainty. "That fundamental is fully priced in, so if what we get out of Poloz and his speech from San Francisco is no change in the tone from what we have already seen, then I don't think it will have much play, said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York. "It might keep us on a 1.32 handle in dollar-CAD but I don't think it is going to push us to new thresholds. That would be much more data-dependent than anything," Anderson said. Poloz is due to speak on the fourth industrial revolution at the Federal Reserve Bank of San Francisco on Thursday evening. Money markets see chances of an interest rate cut from Canada's central bank next month at less than 25%. U.S. stocks seesawed as fresh uncertainty over relations between the United States and China offset upbeat comments by Federal Reserve Chairman Jerome Powell about the U.S. economy. Canada is a major exporter of commodities, including oil, so its economy could be hurt by a more uncertain outlook for global trade. U.S. crude oil futures settled 0.6% higher after the Organization of the Petroleum Exporting Countries said it saw no signs of global recession and rival U.S. shale oil production could grow by much less than expected in 2020. Canadian government bond prices were higher across a flatter yield curve, outperforming U.S. Treasuries after data showed U.S. consumer prices rebounded more than expected in October. The two-year rose 6 Canadian cents to yield 1.572% and the 10-year was up 56 Canadian cents to yield 1.550%. The 10-year yield hit its lowest intraday level since Nov. 4 at 1.530%. (Reporting by Fergal Smith; Editing by Nick Zieminski and Peter Cooney)

CANADA FX DEBT-C$ steadies near 1-month low, weighed by BoC's more dovish stance

13 Nov 2019

(Adds dealer quotes and details throughout, updates prices) * Canadian dollar trades near unchanged against greenback * Price of U.S. oil falls 0.1% * Loonie touches its weakest intraday since Oct. 11 at 1.3257 * 10-year yield exceeds 2-year yield for first time since July 25 By Fergal Smith TORONTO, Nov 12 The Canadian dollar was little changed against its U.S. counterpart on Tuesday, holding near a one-month low it hit earlier in the day as the greenback broadly climbed and investors adjusted to the Bank of Canada's more dovish stance. The U.S. dollar rose against a basket of major currencies, although its gains stalled after U.S. President Donald Trump in a speech offered no new details on the state of the administration's trade war with China. "The big dollar is catching a bit of a bid," said Michael Goshko, corporate risk manager at Western Union Business Solutions. "We did get some indication from the Bank of Canada at the last meeting that it was likely to become more accommodative in the meetings ahead, so that's also taking some of the starch out of the Canadian dollar as well," Goshko said. The loonie has declined by as much as 1.3% since Oct. 30, when Canada's central bank cut its economic growth forecasts and expressed concern about global trade uncertainty. Bank of Canada Governor Stephen Poloz is due to speak on Thursday, which could help guide expectations for the interest rate outlook. At 3:24 p.m. (2024 GMT), the Canadian dollar was trading nearly unchanged at 1.3231 to the greenback, or 75.58 U.S. cents. The currency's strongest level of the session was 1.3217, while it touched its weakest since Oct. 11 at 1.3257. The price of oil, one of Canada's major exports, gave up its earlier gains after Trump's speech. U.S. crude oil futures settled 0.1% lower at $56.80 a barrel. Canadian government bond prices were lower across a steeper yield curve as trading resumed after a holiday on Monday. The two-year fell 2.5 Canadian cents to yield 1.598% and the 10-year was down 17 Canadian cents to yield 1.599%. It was the first time since July 25 that the 10-year yield traded above the 2-year yield. Reversion of the yield curve to upward sloping could reduce fears of an economic slowdown. (Reporting by Fergal Smith; Editing by Sandra Maler and Peter Cooney)

CANADA FX DEBT-C$ hits 3-week low as jobs miss adds to rate cut bets

09 Nov 2019

* Canadian dollar falls 0.4% against the greenback * Loonie hits a three-week low at 1.3237 * Canada sheds 1,800 jobs in October * Canadian bond prices rise across the yield curve By Fergal Smith TORONTO, Nov 8 The Canadian dollar weakened to a three-week low against its U.S. counterpart on Friday as data showing a surprise decline in domestic jobs added to pressure on the currency since the Bank of Canada shifted to a more dovish stance. Canada lost 1,800 jobs in October after robust job growth over the previous two months, data from Statistics Canada showed. Analysts had expected jobs to rise by 15,900. "USD-CAD was already drifting higher off the lows we saw in the last couple of weeks because of concern around changing sentiment and the Bank of Canada," said Brad Schruder, director of corporate sales and structuring at BMO Capital Markets. Last week, the Bank of Canada left the door open to an interest rate cut as it expressed concern about trade uncertainty. Chances of an easing at the central bank's next meeting in December rose to about 25% from 15% before the jobs data, the overnight index swaps market indicated. The loonie could weaken by "another penny, penny-and-a-half" to a level that would then attract buying of the currency by Canadian corporates, Schruder said. Housing data also showed declines. Statistics Canada said that the value of Canadian building permits dropped by a larger-than-expected 6.5% in September to C$8.3 billion, while data from the Canadian Mortgage and Housing Corporation (CMHC) showed that the seasonally adjusted annualized rate of housing starts fell to 201,973 units in October from a revised 221,135 units in September. At 3:30 p.m. (2030 GMT), the Canadian dollar was trading 0.4% lower at 1.3228 to the greenback, or 75.60 U.S. cents. The currency touched its weakest intraday level since Oct. 16 at 1.3237. For the week, the loonie was down 0.7%. The currency's decline came as U.S. President Donald Trump said he had not agreed to roll back tariffs on Chinese goods, denting investor optimism that the United States and China would reach a trade deal. Canada is a major exporter of commodities, including oil, so its economy could be hurt by a prolonged trade war. U.S. crude oil futures clawed back its earlier decline to settled 0.2% higher at $57.24 a barrel. Canadian government bond prices were higher across the yield curve, with the two-year up 8.5 Canadian cents to yield 1.584% and the 10-year rising 32 Canadian cents to yield 1.581%. On Thursday, the 10-year yield touched its highest intraday level since May 24 at 1.650%. (Reporting by Fergal Smith; editing by Jonathan Oatis and Diane Craft)

CORRECTED-CANADA FX DEBT-Loonie rebounds from 8-day low as trade deal hopes rise

08 Nov 2019

(Corrects third bullet point) * Canadian dollar trades near flat against the greenback * Loonie touches an eight-day low at 1.3197 * Price of U.S. oil increases 1.4% * Canadian bond prices fall across a steeper yield curve By Fergal Smith TORONTO, Nov 7 The Canadian dollar edged higher against its U.S. counterpart on Thursday, recovering from an earlier eight-day low as domestic jobs data loomed and Beijing signaled a trade deal with the United States was close to being sealed. At 4:31 p.m. (2131 GMT), the Canadian dollar was trading 0.1% higher at 1.3174 to the greenback, or 75.91 U.S. cents. The currency touched its weakest intraday level since Oct. 30, the day of a Bank of Canada interest rate announcement, at 1.3197. The Bank of Canada has diverged this year from some other central banks, such as the Federal Reserve, that have eased interest rates. It has left its benchmark interest rate on hold at 1.75% as inflation stayed close to its 2% target and Canada's economy added jobs at a robust pace. Canada's employment report for October is due on Friday. "I think the job number tomorrow if it does come outside the range of expectations will move it (the Canadian dollar) quite a bit," said Hosen Marjaee, a senior portfolio manager at Manulife Asset Management. "I think it will have an impact on the Bank of Canada decision on what to do next." The Canadian dollar will edge higher over the coming 12 months, supported by the solid performance of Canada's economy and its high yield relative to other major currencies, a Reuters poll showed. Global shares rose and bond yields climbed after China said it had agreed with the United States to remove tariffs in phases, while state-owned Xinhua News Agency said Beijing was also considering removing restrictions on poultry imports. Canada is a major exporter of commodities, including oil, so its economy could benefit from an improved outlook for global trade. U.S. crude oil futures settled 1.4% higher at $57.15 a barrel as hopes rose for an end to the trade dispute that has weighed on economic growth and fuel demand. Canadian government bond prices were lower across a steeper yield curve in sympathy with U.S. Treasuries. The two-year fell 5.5 Canadian cents to yield 1.625% and the 10-year was down 67 Canadian cents to yield 1.613%. The inversion of Canada's yield curve, a traditional harbinger of recession, receded. The gap between the 2- and 10-year yields narrowed by 4.3 basis points to a spread of 1.2 basis points in favor of the shorter-dated bond, which was the smallest gap since July 29. (Reporting by Fergal Smith; Editing by Andrea Ricci and Peter Cooney)

Canada's yield advantage seen underpinning loonie over coming year: Reuters poll

07 Nov 2019

TORONTO The Canadian dollar, this year's G10 pacesetter, will edge higher over the coming 12 months, supported by the solid performance of Canada's economy and its high yield relative to other major currencies, a Reuters poll showed.

UPDATE 2-Ontario cuts budget deficit forecast, keeps eye on spending restraint

07 Nov 2019

TORONTO, Nov 6 The Canadian province of Ontario, the world's biggest sub-sovereign debtor, kept its focus on spending restraint in a budget update on Wednesday that included a small business tax break and cut the deficit forecast for the current fiscal year.

World News