November 16, 2018 / 10:11 PM / a month ago

CANADA FX DEBT-C$ notches one-week high as greenback broadly slides

 (New throughout, updates prices, market activity and comments)
    * Canadian dollar rises 0.2 percent against the greenback
    * Canadian manufacturing sales rise 0.2 percent in September
    * Canadian bond prices move higher across the yield curve
    * Canada-U.S. 2-year spread narrows by 3.4 basis points

    By Fergal Smith
    TORONTO, Nov 16 (Reuters) - The Canadian dollar strengthened
to its highest in more than one week against its U.S.
counterpart on Friday, extending this week's gain as the
greenback broadly fell and domestic data showed that factory
sales edged higher in September.
    At 4:42 p.m. (2142 GMT), the Canadian dollar          was
trading 0.2 percent higher at 1.3151 to the greenback, or 76.04
U.S. cents.
    The currency touched its strongest level since Nov. 8 at
1.3128. For the week, the loonie was up 0.4 percent.
    The U.S. dollar        fell broadly in the wake of cautious
comments from two U.S. Federal Reserve officials about global
economic growth.             
    "We have seen a little bit of broadbased U.S. dollar
weakness, stronger oil and a stronger Canadian dollar," said
Rahim Madhavji, president at Knightsbridge Foreign Exchange.
"The loonie and oil are highly correlated."
    The price of oil, one of Canada's major exports, was
supported by expectations that the Organization of the Petroleum
Exporting Countries would agree to cut output next month, though
prices were set for a weekly drop on underlying oversupply
worries.      
    Canadian factory sales rose 0.2 percent in September from
August on higher shipments of autos as production ramped up
after a series of assembly plant shutdowns, Statistics Canada
said. Analysts in a Reuters poll had forecast a 0.3 percent
gain.             
    In separate domestic data, net foreign investment in
Canadian securities jumped to C$7.70 billion in September from a
year-low C$2.63 billion in August on higher purchases of money
market paper.             
    Speculators have added slightly to their bearish bets on the
Canadian dollar, data from the U.S. Commodity Futures Trading
Commission and Reuters calculations showed. As of Nov. 13, net
short positions had increased to 2,791 contracts from 2,632 a
week earlier.             
    Canadian government bond prices were higher across the yield
curve in sympathy with U.S. Treasuries. The two-year           
rose 4 Canadian cents to yield 2.219 percent and the 10-year
            climbed 21 Canadian cents to yield 2.364 percent.   
    The gap between Canada's 2-year yield and its U.S.
equivalent narrowed by 3.4 basis points to a spread of 58.9
basis points in favor of the U.S. bond.

 (Reporting by Fergal Smith
Editing by Susan Thomas and David Gregorio)
  
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