August 6, 2019 / 8:18 PM / 2 months ago

CANADA FX DEBT-C$ hits a 7-week low on rising global trade concerns

 (Adds strategist quote and details throughout, updates prices)
    * Canadian dollar fell 0.4% against the greenback
    * The loonie touches its lowest level since June 20 at
1.3291
    * U.S. oil prices decrease by 1.9%
    * Canada's 10-year yield hits a near three-year low

    By Levent Uslu
    TORONTO, Aug 6 (Reuters) - The Canadian dollar weakened to a
near seven-week low against its U.S. counterpart on Tuesday as
investors worried about rising trade tensions between the United
States and China.
    A yearlong U.S.-China trade war has boiled over as
Washington accused Beijing of manipulating its currency after
China let the yuan drop to its lowest point in more than a
decade.             
    Canada exports many commodities, including oil, so its
economy could be hurt by an escalation of trade tensions.
    "In the last 24 hours, we've just had a lot of developments
in terms of trade tensions between the U.S. and China and those
are impacting (investor) sentiments." said Eric Theoret, a
currency strategist at Scotiabank.
    At 3:30 p.m. (1930 GMT), the Canadian dollar          was
trading 0.4% lower at 1.3277 to the greenback, or 75.32 U.S.
cents. The currency hit its lowest intraday level since June 20
at 1.3291.
    Last month, the Bank of Canada highlighted the risks that
trade wars pose to the global economy as it left its benchmark
interest rate unchanged at 1.75%.             
    Chances of a Bank of Canada interest rate cut this year have
climbed to more than 70% from about 40% after the release of
data last week showing the economy strengthened more than
expected in June, the overnight index swap market indicated.
          
    The decline for the loonie came as the price of oil was
pressured by increasing global trade tensions. U.S. crude oil
futures        settled 1.9% lower at $53.63 a barrel.
    Canadian government bond prices were higher across the yield
curve, with the two-year            up 22 Canadian cents to
yield 1.346% and the 10-year             rising 136 Canadian
cents to yield 1.234%.
    The 10-year bond yield hit its lowest intraday level since
November 2016 at 1.223%.

 (Reporting by Levent Uslu; editing by Jonathan Oatis and Sandra
Maler)
  
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