March 18, 2019 / 1:31 PM / 4 months ago

CANADA FX DEBT-C$ clings to last week's gains ahead of federal budget

    * Canadian dollar near flat against the greenback
    * Foreign investment in Canadian securities rebounds in
January
    * Price of U.S. oil rises 0.2 percent
    * Canadian bond prices dip across the yield curve

    TORONTO, March 18 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Monday, trading in a
narrow range ahead of Tuesday's federal budget as oil prices
rose and investors bet that the U.S. Federal Reserve will strike
a dovish tone this week.
    At 9:07 a.m. (1307 GMT), the Canadian dollar          was
trading nearly unchanged at 1.3333 to the greenback, or 75.00
U.S. cents. The currency, which advanced 0.6 percent last week,
traded in a range of 1.3304 to 1.3344.
    The U.S. dollar        declined against a basket of major
currencies ahead of the Fed interest rate decision on Wednesday.
Traders expect there will be no Fed rate hikes this year, and
are even building in bets for a rate cut in 2020.
                        
    The price of oil, one of Canada's major exports, was
supported by the prospect of prolonged OPEC-led oil supply curbs
though concern that an economic downturn may dent fuel
consumption curbed gains.             
    U.S. crude oil futures        were up 0.2 percent at $58.63
a barrel.
    With a federal election looming and Prime Minister Justin
Trudeau's government facing its worst political crisis in four
years, Canada's ruling Liberals are expected to table a
goody-filled budget in a bid to get back on course with voters.
               
    Foreign investors bought a net C$28.40 billion ($21.29
billion) in Canadian securities in January, led by federal
government bonds, following a revised C$20.49 billion total
divestment in December, Statistics Canada said on Monday.
            
    Canada's inflation report for February and January retail
sales data are due on Friday.
    Canadian government bond prices were lower across the yield
curve on Monday, with the two-year            down 1.5 Canadian
cents to yield 1.631 percent and the 10-year             falling
13 Canadian cents to yield 1.731 percent.
    On Friday, the 10-year yield touched its lowest since June
2017 at 1.704 percent.

 (Reporting by Fergal Smith
Editing by Susan Thomas)
  
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