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CANADA FX DEBT-C$ nudges higher as retail sales, Jackson Hole in focus
August 21, 2017 / 9:01 PM / 3 months ago

CANADA FX DEBT-C$ nudges higher as retail sales, Jackson Hole in focus

    * Canadian dollar at C$1.2569 or 79.56 U.S. cents
    * Bond prices mostly lower across the maturity curve

    By Solarina Ho
    TORONTO, Aug 21 (Reuters) - The Canadian dollar held firm
against the U.S. dollar on Monday despite a sharp fall in oil
prices, as the greenback stumbled on geopolitical fears over
North Korea and investors girded themselves for the annual
central bank conference in Jackson Hole later this week.
    In Canada, investors were also focused on retail sales data
due on Tuesday. A Reuters poll of analysts forecast a 0.3
percent rise, but unchanged when auto sales are excluded.
    Adam Button, a currency analyst at ForexLive in Montreal
said the loonie was showing signs of independent strength. "The
Canadian dollar could take off on retail sales ... small signs
of strength are leading big moves."
    Last week, the currency touched a two-week high against a
greenback weighed by political uncertainty, after Canadian data
showed an uptick in the rate of underlying inflation and oil
prices jumped.
    At 4:00 p.m. ET (2000 GMT), the Canadian dollar          was
trading at C$1.2569 to the greenback, or 79.56 U.S. cents, up
0.1 percent.
    The Canadian dollar traded between C$1.2555 and C$1.2608
during the session.
    "What's surprising is the Canadian dollar is so well bid
despite a big fall in oil today," said Button. "The Canadian
dollar is showing its resilience."
    The traditional correlation between the Canadian dollar and
prices of oil, a major Canadian export, has been more tenuous
recently as focus shifted toward monetary policy decisions. U.S.
crude oil futures settled at $47.37 a barrel, down $1.14 or 2.35
percent.
    There are some expectations Federal Reserve Chair Janet
Yellen could highlight the need to keep a watchful eye on risks
to inflation goals and financial stability at the Jackson Hole
meeting.
    "Any hint the Fed is heading to the sidelines, it's going to
be ugly (for the U.S. dollar)," said Button.
    Markets were also jittery after the start of annual military
exercises by South Korean and U.S. forces angered North Korea,
which denounced the joint drills as a step toward nuclear war.
            
    Earlier on Monday, domestic data showed wholesale trade
slipping by 0.5 percent in June following eight consecutive
monthly increases, greater than the 0.2 percent forecast by
analysts.
    Canadian government bond prices were mostly lower across the
maturity curve, with the two-year            price down one 
Canadian cent to yield 1.25 percent and the benchmark 10-year
            falling eight Canadian cents to yield 1.88 percent.
    The Canada-U.S. two-year bond spread stood at -5.3 basis
points, while the 10-year spread stood at -30.1 basis points.

 (Reporting by Solarina Ho; Editing by Nick Zieminski and Tom
Brown)
  
 

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