May 23, 2019 / 1:24 PM / 25 days ago

CANADA FX DEBT-C$ hits 6-day low as investors fret about tech cold war

    * Canadian dollar declines 0.4% against the greenback
    * Price of U.S. oil falls 3.2%
    * Canadian wholesale trade rises 1.4% in March
    * Bond prices rise across the yield curve

    By Fergal Smith
    TORONTO, May 23 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Thursday, as investor worries
about the trade war between the United States and China
overshadowed domestic data showing a stronger-than-expected gain
for wholesale trade.
    At 9:15 a.m. (1315 GMT), the Canadian dollar          was
trading 0.4% lower at 1.3486 to the greenback, or 74.15 U.S.
cents. The currency touched its weakest level since last Friday
at 1.3493.
    Canadian wholesale trade increased by 1.4% in March from
February, Statistics Canada said, beating analysts estimates of
a 0.9% increase.            
    The data included a rise in trade volumes of 1%. That was
"strong" and could boost prospects for next week's gross
domestic product data, said Andrew Grantham, a senior economist
at CIBC Capital Markets, in a note.
    Meanwhile, global stocks fell for a second straight day
after data showing a recovery in euro zone business activity was
weaker than expected this month and on fears that the U.S.-China
trade war could spiral into a technology cold war between the
two countries.                         
    Canada exports many commodities, including oil, and runs a
current account deficit, so its economy could be hurt by a
slowdown in the global flow of capital or trade.
    Oil prices extended falls from the previous session amid
surging U.S. crude inventories as low refinery runs and ongoing
trade tensions weighed on the demand outlook. U.S. crude oil
futures        were down 3.2% at $59.44 a barrel.             
    Canadian government bond prices were higher across the yield
curve in sympathy with U.S. Treasuries. The two-year           
rose 5.5 Canadian cents to yield 1.633% and the 10-year
            was up 31 Canadian cents to yield 1.682%.  

 (Reporting by Fergal Smith
Editing by Nick Zieminski)
  
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