* Canadian dollar at C$1.3616, or 73.44 U.S. cents
* Bond prices higher across the yield curve
By Solarina Ho
TORONTO, May 17 The Canadian dollar eased
slightly against the U.S. dollar on Wednesday, as political
uncertainty in Washington supported safe-haven currencies and
domestic manufacturing sales rose in line with economists'
At 4:00 p.m. ET (2000 GMT), the Canadian dollar was
trading at C$1.3616 to the greenback, or 73.44 U.S. cents, down
0.1 percent, according to Reuters data.
"It's a conundrum today...because the U.S. dollar is
obviously on the backfoot," said Amo Sahota, director at Klarity
FX in San Francisco, adding that other currency drivers
including oil prices and interest rate spreads between the U.S.
and Canada did not reflect the softer Canadian dollar.
"You would expect to see some more Canadian dollar strength
coming through...The focus has been on the majors and what you'd
call your classic risk trades."
The yen and Swiss franc outperformed as the greenback
fell against a basket of major currencies. The euro and sterling
also outperformed the Canadian dollar.
Talk that U.S. President Donald Trump could face the threat
of impeachment weighed on risk-sensitive assets, including
richly valued stocks.
The currency traded in a range of C$1.3573 and C$1.3641
during the North American session.
Sahota said there was still room for the USD/CAD to unwind
and move back close to C$1.35 area. Earlier this month, the
Canadian dollar touched a 14-month low at C$1.3793 on an
uncertain trade outlook with the United States and troubles at
an alternative mortgage lender.
Mexican Economy Minister Ildefonso Guajardo said on Tuesday
he expects Trump's administration to tell Congress early next
week of plans to renegotiate the North American Free Trade
Agreement, a move that would produce talks by late August.
Losses for the loonie came even as prices of oil, one of
Canada's major exports, climbed. U.S. crude prices were
up 0.72 percent to $49.01 a barrel after U.S. crude inventories
declined for the sixth straight week, a positive signal for
markets ahead of an expected decision by the Organization of the
Petroleum Exporting Countries to extend supply cuts.
In domestic data, manufacturing sales rebounded 1.0 percent
in March, driven by gains in the motor vehicle sector and record
sales in the food industry, figures from Statistics Canada
Canadian government bond prices were higher across the yield
curve, with the two-year up 8 Canadian cents to yield
0.660 percent and the 10-year climbing C$1.14 to
yield 1.447 percent.
(Reporting by Solarina Ho and Fergal Smith; Editing by Meredith
Mazzilli and Diane Craft)