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CANADA FX DEBT-C$ little changed vs weaker greenback as investors weigh rising debt
September 15, 2017 / 2:17 PM / 7 days ago

CANADA FX DEBT-C$ little changed vs weaker greenback as investors weigh rising debt

    * Canadian dollar at C$1.2163, or 82.22 U.S. cents
    * Bond prices lower across the yield curve
    * Canada-U.S. 10-year spread narrows by 3 basis points

    TORONTO, Sept 15 (Reuters) - The Canadian dollar held steady
on Friday against the U.S. dollar as an unexpected fall in U.S.
retail sales pressured the greenback, while investors weighed
data showing Canadians debt as a share of income reached a
record high.
    The ratio of debt to disposable income rose to 167.8 percent
in the second quarter from a downwardly revised 166.6 percent in
the first quarter, Statistics Canada said.
    The Bank of Canada, which has raised interest rates twice in
the last three months, has been concerned that highly indebted
Canadians have less flexibility to deal with sudden changes in
their income.
    Resales of Canadian homes rose 1.3 percent in August from
July, breaking a string of four straight monthly declines, as
Toronto sales bounced back after dramatic cooling during the
spring market, separate data from the Canadian Real Estate
Association showed.             
    The U.S. dollar        retreated against a basket of major
currencies after data showed U.S. retail sales fell 0.2 percent
in August as Hurricane Harvey likely depressed motor vehicle
purchases.             
    At 9:57 a.m. ET (1357 GMT), the Canadian dollar          was
nearly unchanged at C$1.2163 to the greenback, or 82.22 U.S.
cents.
    The currency traded in a range of C$1.2120 to C$1.2186.    
    The steady profile for the loonie came as shares and other
risk assets barely moved after the latest missile test by North
Korea.             
    U.S. crude        prices, which have climbed this week on
higher demand forecasts and the restart of refineries in the
United States following recent storms, were up 0.04 percent at
$49.91 a barrel.             
    Oil is one of Canada's major exports.     
    While the Bank of Canada's inflation targeting regime has
worked well, the central bank is open to alternatives and wants
to communicate in a way that avoids unproductive volatility,
Bank of Canada senior deputy governor Carolyn Wilkins said on
Thursday.             
    Canadian government bond prices were lower across the yield
curve, with the two-year            down 4.5 Canadian cents to
yield 1.604 percent and the 10-year             falling 23
Canadian cents to yield 2.086 percent.
    The gap between the 10-year yield and its U.S. counterpart
narrowed by 3 basis points to a spread of -11.1 basis points.
Last Friday, the spread hit its narrowest since October 2013 at
-7.8 basis points.

 (Reporting by Fergal Smith; Editing by Bernadette Baum)
  
 

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