July 23, 2019 / 9:26 PM / a month ago

CANADA FX DEBT-C$ hits 1-month low as weak data triggers profit-taking

 (Adds strategist quotes and details throughout, updates prices)
    * Canadian dollar weakens by 0.2% against the greenback
    * Loonie hits a near four-week low at 1.3164
    * Price of U.S. oil rises by 1%
    * Canadian bond prices fall across the yield curve

    By Levent Uslu
    TORONTO, July 23 (Reuters) - The Canadian dollar weakened to
a near one-month low against its U.S. counterpart on Tuesday, as
the greenback broadly rallied and as weaker-than-expected
domestic data since the end of last week prompted investors to
sell the currency.
    At 4:17 p.m. (2017 GMT), the Canadian dollar          was
trading 0.2% lower at 1.3142 to the greenback, or 76.09 U.S.
cents.
    The currency, which hit its weakest intraday level since
June 26 at 1.3164, had been on a strong run since May. On
Friday, it notched its strongest level in nearly nine months at
1.3016.
    Since Friday, domestic data for May has showed a surprise
decline in both retail sales and wholesale trade.
                        
    The weaker-than-expected data "is encouraging people to take
some profits," said Marc Chandler, chief market strategist at
Bannockburn Global Forex LLC. "At the same time, the U.S. dollar
is enjoying broad-based strength ahead of what is expected to be
an easier monetary policy from the ECB."      
    The European Central Bank is expected to change its forward
guidance towards easing this week, a Reuters poll showed.
            
    The U.S. dollar        was also boosted on Tuesday against a
basket of currencies by a two-year deal between U.S. President
Donald Trump and lawmakers to lift government borrowing limits
to cover spending.             
    Meanwhile, the price of oil, one of Canada's major exports,
rose after the head of U.S. Central Command said the United
States may have taken down a second Iranian drone over the
Strait of Hormuz last week. U.S. crude oil futures       
settled 1% higher at $56.77 a barrel.             
    Canadian government bond prices were lower across the yield
curve, with the two-year            down 3 Canadian cents to
yield 1.453% and the 10-year             falling 8 Canadian
cents to yield 1.494%.
    The 10-year yield touched its lowest intraday since July 4
at 1.454.

 (Reporting by Levent Uslu
Editing by Susan Thomas and Lisa Shumaker)
  
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