August 15, 2019 / 8:02 PM / 4 months ago

CANADA FX DEBT-C$ hovers near 8-day low amid global recession worries

 (Adds strategist quote and details throughout, updates prices)
    * Canadian dollar trades nearly unchanged against the
greenback
    * Canada's non-farm payroll employment rises by 73,700 in
July
    * U.S. crude oil prices decrease by 1.4%
    * Canada's 10-year yield hits a near three-year low at
1.084%

    By Levent Uslu
    TORONTO, Aug 15 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Thursday but held close
to an eight-day low hit earlier in the session on worries about
the global economic outlook.
    U.S. 30-year Treasury yields fell to a record low below 2%,
10-year notes dropped to a three-year trough and the 2-year
yield hit its lowest level since October 2017 amid persistent
fears about global trade tensions and economic slowdowns.
            
    Canadian yields have also fallen to multi-year lows and the
yield curve has inverted the most in nearly two decades, which
could coerce the Bank of Canada to cut interest rates rather
than risk an economic downturn.             
    "Markets are still very concerned about the price action in
the U.S. bond markets and the pressure on yields," said Amo
Sahota, director at Klarity FX in San Francisco. "It may cause
dollar-CAD to push up."
    Canada exports many commodities, including oil, making it
vulnerable to a global economic slowdown.
    At 3:27 p.m. (1927 GMT), the Canadian dollar          was
trading nearly unchanged at 1.3321 to the greenback, or 75.07
U.S. cents. The currency touched its weakest intraday level
since last Wednesday at 1.3339.
    The loonie fell to an eight-day low despite domestic data
showing non-farm payroll employment rose by 73,700 in July and
that home sales climbed for a fifth consecutive month.
            
    Oil prices were pressured by mounting recession concerns and
a surprise boost in U.S. crude inventories. U.S. crude oil
futures        settled 1.4% lower at $54.47 a
barrel.            
    Canadian government bond prices firmed across the yield
curve in sympathy with U.S. Treasuries. The two-year           
rose 8.5 Canadian cents to yield 1.307% and the 10-year
            was up 47 Canadian cents to yield 1.096%.
    The 10-year yield touched its lowest intraday level since
October 2016 at 1.084%. It was trading 20.4 basis points below
the 2-year yield, which was nearly the most that the curve has
inverted since May 1999.

 (Reporting by Levent Uslu; Editing by Richard Chang)
  
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