July 21, 2020 / 8:18 PM / 17 days ago

CANADA FX DEBT-C$ climbs to 5-week high vs U.S. dollar as oil prices rise

    * Canadian dollar at C$1.3459 or 74.30 U.S. cents
    * Bond yields edge higher across the maturity curve

 (Adds comment, updates rates)
    By Saqib Iqbal Ahmed
    July 21 (Reuters) - The Canadian dollar strengthened to a
more than five-week high against its U.S. counterpart on
Tuesday, helped by a rise in oil prices on positive news about
vaccine trials and a European Union stimulus deal as well as
data showing a rebound in retail sales. 
    The Canadian dollar        was at C$1.3459 to the greenback,
or 74.30 U.S. cents, stronger than Monday's close of C$1.3533,
or 73.89 U.S. cents.
    The loonie, which has been in a narrow range against the
greenback for the past seven weeks, was at its strongest level
since June 11.
    "Oil, and by association the Canadian dollar, and other
oil-correlating currencies, have been boosted by a broader
risk-on theme in global markets," said Jonathan Coughtrey,
managing director at Action Economics.
    The price of oil, one of Canada's major exports, rose on
Tuesday, helped by an agreement among European Union leaders on
a 750 billion euro ($859 billion) fund to prop up
coronavirus-hit economies and by promising coronavirus vaccine
data released on Monday.                          
    That took prices to levels last seen when an oil price war
erupted in early March between Russia and Saudi Arabia.
            
    Canadian retail sales increased by a record 18.7% in May
from April to C$41.79 billion ($31.06 billion), as higher sales
at motor vehicle and parts dealers led the rebound, Statistics
Canada said on Tuesday.             
    In a preliminary flash estimate, Statistics Canada said June
retail sales could rise by 24.5%.
    "The apparent acceleration in June is a better result than
we were expecting," Stephen Brown, senior Canada economist at
Capital Economics, said in a note.
    Canadian government bond yields edged higher across the 
maturity curve. The two-year            yield was at 0.28% up
from 0.27% late on Monday, while the benchmark Canadian 10-year
            yield rose to 0.515% from Monday's 0.514%.

 (Reporting by Saqib Iqbal Ahmed; Editing by Jonathan Oatis and
Peter Cooney)
  
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