August 22, 2019 / 1:56 PM / 3 months ago

CANADA FX DEBT-C$ rises as oil prices increase, Powell speech in focus

    * Canadian dollar rises 0.1% against the greenback
    * Canadian wholesale trade rose 0.6% in June from May
    * U.S. oil prices increase by 1%
    * Bond prices move lower across the yield curve

    By Levent Uslu
    TORONTO, Aug 22 (Reuters) - The Canadian dollar edged higher
against its U.S. counterpart on Thursday, adding to the previous
day's gains, as oil prices increased and investors awaited the
Federal Reserve chairman's speech.
    The price of oil, one of Canada's major exports, rose on a
drop in U.S. crude inventories and OPEC-led supply cuts,
although worries about the global economy capped gains. U.S.
crude oil futures        were up 1% at $56.11 a barrel.
            
    Fed Chairman Jerome Powell's speech on Friday in Jackson
Hole, Wyoming, could indicate whether the U.S. central bank will
continue to cut interest rates, which could also help guide
expectations about the Bank of Canada's interest rate decision.
    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%.             
    The Canadian dollar          was trading 0.1% higher at
1.3283 to the greenback, or 75.28 U.S. cents at 9:26 a.m.
ET(1326 GMT). The currency, which rallied on Wednesday on
stronger-than-expected domestic inflation data, was trading in a
range of 1.3276 to 1.3315.
    Canada's annual inflation rate held steady in July at 2% as
lower costs for services were offset by higher prices for
durable goods, beating estimates for a 1.7% inflation rate.
            
    The rise for the loonie came as domestic data showed a 0.6%
increase in Canadian wholesale trade in June from May. Analysts
surveyed by Reuters had forecast a 0.3% increase.             
    Canada's retail sales data is due on Friday, with a Reuters
poll estimating a 0.1% decrease.
    Canadian government bond prices were lower across the yield
curve, with the two-year            down 5.5 Canadian cents to
yield 1.437% and the 10-year             falling 39 Canadian
cents to yield 1.263%.

 (Reporting by Levent Uslu; editing by Nichola Saminather and
Jonathan Oatis)
  
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