November 20, 2019 / 2:39 PM / 22 days ago

CANADA FX DEBT-Canadian dollar hits 6-week low as U.S.-China tensions climb

    * Canadian dollar weakens 0.1% against the greenback
    * Loonie hits a near six-week low at 1.3315
    * Canada's annual inflation rate holds steady at 1.9% in
October
    * Canadian bond prices rise across a flatter yield curve

    By Fergal Smith
    TORONTO, Nov 20 (Reuters) - The Canadian dollar weakened to
a near six-week low against the greenback on Wednesday as
investor sentiment soured on U.S.-China tensions, but the loonie
clawed back some losses after domestic inflation data that was
in line with expectations.
    At 9:19 a.m. (1419 GMT), the Canadian dollar          was
trading 0.1% lower at 1.3285 to the greenback, or 75.27 U.S.
cents. The currency touched its weakest intraday level since
Oct. 10 at 1.3315.
    Canada's annual inflation rate held steady in October at
1.9% as expected, data from Statistics Canada showed, marking
the third straight month of little change.             
    "The external climate is of more concern (than inflation)
for the loonie at the moment and Bank of Canada officials are
doing a fantastic job of talking it (the currency) down," said
Simon Harvey, FX market analyst for Monex Europe and Monex
Canada.
    On Tuesday, Bank of Canada Senior Deputy Governor Carolyn
Wilkins said the global economy is facing immense challenges
that could spill over into Canada.             
    Bank of Canada Governor Stephen Poloz is due to speak on
Thursday on economic change.       
    World stocks were knocked off 22-month highs after the
United States Senate unanimously passed legislation on Tuesday
aimed at protecting human rights in Hong Kong amid a crackdown
on a pro-democracy protest movement, drawing condemnation from
Beijing.                         
    The tensions could make it more difficult for the United
States and China to reach a trade deal. Canada is a major
exporter of commodities, including oil, so its economy could be
hurt by prolonged trade uncertainty.
    Oil edged higher on Wednesday as Iran-related tensions
escalated but receding hopes for a quick solution to the
U.S.-China trade war dragged on prices. U.S. crude oil futures
       were up 1% at $55.76 a barrel.             
    Canadian government bond prices were higher across a flatter
yield curve in sympathy with U.S. Treasuries. The two-year
           rose 1 Canadian cent to yield 1.512% and the 10-year
            was up 23 Canadian cents to yield 1.420%.
    The 10-year yield touched its lowest intraday level since
Oct. 10 at 1.394%.

 (Reporting by Fergal Smith; Editing by Steve Orlofsky)
  
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