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Fergal Smith

Canadian dollar beats G10 peers as oil climbs to highest this year

10:02pm GMT

TORONTO The Canadian dollar strengthened against its U.S. counterpart on Wednesday to its highest in two weeks, posting the biggest rise among its peers, as oil prices rallied and ahead of speech on Thursday by Bank of Canada Governor Stephen Poloz.

Buffett's Suncor bet to revive investor interest in Canadian energy

6:42pm GMT

TORONTO Berkshire Hathaway Inc's re-investment in Suncor Energy Inc highlights the benefits of being an integrated oil company and could revive investor interest in the languishing Canadian energy sector, fund managers said.

CANADA FX DEBT-C$ gains as investors bet on trade talks breakthrough

19 Feb 2019

(Adds strategist quotes and details throughout; updates prices) * Canadian dollar rises 0.2 percent against the greenback * Price of U.S. oil advances 0.9 percent * Canadian bond prices dip across much of the yield curve By Fergal Smith TORONTO, Feb 19 The Canadian dollar rallied to its highest level in nearly a week against a broadly weaker greenback on Tuesday, as oil prices rose and investors bet on a breakthrough in trade talks between the United States and China. Optimism that a new round of talks between China and the United States would help resolve their trade conflict triggered selling of the safe-haven U.S. dollar , which fell against a basket of major currencies. "It seems to be a risk-on event," said Rahim Madhavji, president at Knightsbridge Foreign Exchange. "There are some rumors going around that there's some potential breakthrough in terms of talks with China." Canada is a major producer of commodities, including oil, so its economy could benefit from improved prospects for global trade. U.S. crude oil futures settled 0.9 percent higher at $56.09 a barrel, boosted by tightening supplies, while U.S. stocks extended last week's rally. At 3:05 p.m. (2005 GMT), the Canadian dollar was trading 0.2 percent higher at 1.3210 to the greenback, or 75.70 U.S. cents. The currency touched its strongest intraday level since Feb. 13 at 1.3207. Gains for the loonie come ahead of a speech on Thursday by Bank of Canada Governor Stephen Poloz. He is due to speak in Montreal on monetary policy. Money markets expect the Bank of Canada to keep interest rates on hold over the coming months after the central bank said in January that low oil prices, which have led to production cuts in Alberta, and a weak housing market, harmed the economy in the fourth quarter of 2018 and would continue to do so in the first quarter of this year. Canadian retail sales data for December is due on Friday. Canadian government bond prices edged lower across much of the yield curve, with the two-year down 0.5 Canadian cent to yield 1.779 percent and the 10-year falling 5 Canadian cents to yield 1.901 percent. (Reporting by Fergal Smith; Editing by David Gregorio and Peter Cooney)

CANADA FX DEBT-C$ rises as Warren Buffett takes stake in Canada's oil patch

15 Feb 2019

(Adds strategist quotes and details throughout, updates prices) * Canadian dollar rises 0.4 percent against the greenback * For the week, the loonie climbs 0.3 percent * Price of U.S. oil rises 2.2 percent * Canadian home sales rise 3.6 percent in January * Canadian bond prices fall across the yield curve By Fergal Smith TORONTO, Feb 15 The Canadian dollar rallied against the greenback on Friday as domestic data eased fears about a weak housing market and after a bet by Warren Buffett on one of Canada's major energy companies that could boost sentiment in the country's oil patch. Warren Buffett's Berkshire Hathaway Inc said on Thursday it had taken a fresh stake in Suncor Energy Inc for the second time in about six years, sending the company's shares nearly four percent higher on Friday. "Warren Buffett planting his flag in the Canadian oil patch is a promising sign that we may have reached a bottom in Canadian energy," said Adam Button, chief currency analyst at ForexLive. The Bank of Canada expected in January investment in the energy sector to contract because of low oil prices and production curtailments in Alberta, as it signaled the pace of future interest rate hikes could be more gradual. The central bank also worried about a weak housing market, after activity slowed at the end of 2018. Data on Friday from the Canadian Real Estate Association showed home sales in January remained below levels posted one year ago, but that activity rose 3.6 percent from December. The housing data was better than expected and "calmed the nerves" of investors, Button said. At 3:56 p.m. EST (2056 GMT), the Canadian dollar was trading 0.4 percent higher at 1.3246 to the greenback, or 75.49 U.S. cents. The currency on Thursday touched its weakest intraday level in nearly three weeks at 1.3340, but still finished the week up 0.3 percent. Gains for the loonie came as stocks were boosted by rising hopes the United States and China can hammer out an agreement resolving their protracted trade war. Canada is a major producer of commodities, including oil, so its economy could benefit from reduced global economic uncertainty. U.S. crude oil futures settled 2.2 percent higher at $55.59 a barrel as this week's announcement of a higher-than-expected supply cut by Saudi Arabia encouraged investors. Data from Statistics Canada showed foreign investors sold a net C$18.96 billion in Canadian securities in December, led by a record divestment in bonds. This was the highest divestment since October 2007. Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries. The 10-year fell 16 Canadian cents to yield 1.895 percent. Canada's bond market will be closed on Monday for the Family Day holiday. (Reporting by Fergal Smith Editing by Chris Reese)

CANADA FX DEBT-C$ hits 3-week low after weak domestic and U.S. data

14 Feb 2019

(Adds investor quotes and details on activity; updates prices) * Canadian dollar falls 0.3 percent against greenback * Loonie touches its weakest since Jan. 25 at 1.3340 * Canadian factory sales drop 1.3 percent in December * Price of U.S. oil rises nearly one percent * Canadian bond prices rally across the yield curve By Fergal Smith TORONTO, Feb 14 The Canadian dollar fell to its lowest in nearly three weeks against the greenback on Thursday, pressured by domestic data showing a surprise drop in factory sales and U.S. data that upset hopes the global economy is stabilizing. U.S. retail sales recorded their biggest drop in more than nine years in December as receipts fell across the board, suggesting a sharp slowdown in economic activity at the end of 2018. "It seems to be at this point less about what's going on in the Canadian domestic economy and more a focus on what is going on in the global economy and by that I mean, retail sales today out of the U.S. have raised concerns about the direction of the U.S. economy," said Tim Alt, a portfolio manager at Aviva Investors. Canada, which sends about 75 percent of its exports to the United States, is a major producer of commodities, including oil. So its economy could be hurt by a slowdown in global growth. Canadian factory sales fell by 1.3 percent in December from November on lower petroleum and coal product sales, Statistics Canada said. Analysts had forecast an increase of 0.2 percent. "The surprising fall in factory activity will take Q4 GDP tracking forecasts below one percent," Royce Mendes, a senior economist at CIBC Capital Markets said in a research comment. "Soft GDP prints to close out last year and begin this one will keep the Bank of Canada on the sidelines for at least the next few months," Mendes said. The Bank of Canada has projected that growth slowed temporarily in the fourth quarter of 2018 and the first quarter of this year due mainly to lower oil prices. Money markets see chances of an interest rate hike this year at less than 20 percent. U.S. crude oil futures settled nearly one percent higher on Thursday at $54.41 a barrel. Still, oil has fallen nearly 30 percent since October. At 4:09 p.m. (2109 GMT), the Canadian dollar was trading 0.3 percent lower at 1.3293 to the greenback, or 75.23 U.S. cents. The currency touched its weakest level since Jan. 25 at 1.3340. Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries. The two-year rose 8.5 Canadian cents to yield 1.768 percent and the 10-year climbed 47 Canadian cents to yield 1.880 percent. (Reporting by Fergal Smith; Editing by Bernadette Baum and Diane Craft)

CANADA FX DEBT-C$ slides to 3-week low on surprise drop in factory sales

14 Feb 2019

* Canadian dollar falls 0.5 percent against greenback * Canadian factory sales drop 1.3 percent in December * Price of U.S. oil drops 0.8 percent * Canadian bond prices rally across the yield curve By Fergal Smith TORONTO, Feb 14 The Canadian dollar weakened to its lowest in nearly three weeks against the greenback on Thursday as oil prices fell and after domestic data showed a drop in factory sales that could crimp estimates for how much the economy grew in the fourth quarter. At 10:01 a.m. (1501 GMT), the Canadian dollar was trading 0.5 percent lower at 1.3327 to the greenback, or 75.04 U.S. cents. The currency touched its weakest level since Jan. 25 at 1.3331. Canadian factory sales fell by 1.3 percent in December from November on lower petroleum and coal product sales, Statistics Canada said. Analysts had forecast an increase of 0.2 percent. "Refinery shutdowns in November don't look to have come back online and the challenges only appear to have increased," Royce Mendes, a senior economist at CIBC Capital Markets said in a research comment. "The surprising fall in factory activity will take Q4 GDP tracking forecasts below one percent ... soft GDP prints to close out last year and begin this one will keep the Bank of Canada on the sidelines for at least the next few months," Mendes said. The Bank of Canada has projected that growth slowed temporarily in the fourth quarter of 2018 and the first quarter of this year due mainly to lower prices for oil, one of Canada's major exports. Money markets see chances of an interest rate hike this year at less than 20 percent. U.S. crude oil futures fell 0.8 percent to $53.45 a barrel on Thursday, reducing some of this week's gains, and U.S. stocks edged lower as a sharp drop in U.S. retail sales in December offset investor optimism that the United States and China could resolve their trade dispute. Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries. The two-year rose 9.5 Canadian cents to yield 1.763 percent and the 10-year climbed 55 Canadian cents to yield 1.870 percent. (Reporting by Fergal Smith; Editing by Bernadette Baum)

CANADA FX DEBT-C$ reverses from one-week high as greenback rallies

13 Feb 2019

(Adds strategist quotes and details on activity; updates prices) * Canadian dollar falls 0.2 percent against the greenback * Loonie touches its strongest intraday since Feb. 6 at 1.3197 * Price of U.S. oil climbs 1.5 percent * Canadian home prices fall for fourth straight month in January * Canadian bond prices decline across the yield curve By Fergal Smith TORONTO, Feb 13 The Canadian dollar weakened against its U.S. counterpart on Wednesday, pulling back from an earlier one-week high, after the release of U.S. inflation data that prompted some investors to bet that the Federal Reserve could raise interest rates further. The U.S. dollar rose against a basket of major currencies, reverse the prior day's decline, after a measure of inflation excluding energy prices rose. "We are seeing a little bit of dollar strength here," said Erik Nelson, a currency strategist at Wells Fargo. "We had some solid CPI numbers this morning, and maybe some very slight increase in speculation that the Fed is not done here." Higher U.S. interest rates could reduce the attractiveness of buying lower-yielding Canadian bonds. The gap between Canada's two-year yield and its U.S. equivalent widened by 1.6 basis points to a spread of 72 basis points in favor of the U.S. bond. At 4:38 p.m. (2138 GMT), the Canadian dollar was trading 0.2 percent lower at 1.3256 to the greenback, or 75.44 U.S. cents. The currency touched its strongest level intraday since Feb. 6 at 1.3197. The one-week high for the loonie came as U.S. stocks were boosted by hopes the United States and China can iron out a trade deal. A U.S.-China deal could boost prospects for Canada's economy as a major producer of commodities, including oil. U.S. crude oil futures settled 1.5 percent higher at $53.90 a barrel on Wednesday, as Saudi Arabia said it would cut crude exports and deliver an even deeper cut to its production. Canadian home prices fell 0.1 percent in January, the fourth consecutive month of decline, led by weakness in major Western Canadian cities, the Teranet-National Bank Composite House Price Index showed. Canadian government bond prices were lower across the yield curve in sympathy with Treasuries. The two-year fell 3.7 Canadian cents to yield 1.818 percent and the 10-year declined 14 Canadian cents to yield 1.935 percent. (Reporting by Fergal Smith Editing by Tom Brown)

Canadian dollar gains as oil rallies, investors embrace risk

12 Feb 2019

TORONTO The Canadian dollar strengthened against the greenback on Tuesday, adding to this year's gains as oil prices climbed and as risk appetite was boosted by the potential de-escalation of the trade dispute between the United States and China.

Canadian dollar dips as oil falls, investors demand greenbacks

11 Feb 2019

TORONTO The Canadian dollar edged lower against its U.S. counterpart on Monday as oil prices fell and investors sought to own greenbacks, betting that the U.S. currency would fare best as the global economy slows.

CANADA FX DEBT-C$ rallies on jobs gain but ends lower for the week

08 Feb 2019

(Adds strategist quotes and details throughout; updates prices) * Canadian dollar climbs 0.3 percent against the U.S. dollar * Canada adds 66,800 jobs in January * Price of U.S. oil falls 0.2 percent * For the week, the loonie ends down 1.3 percent * Canadian bond prices decline across much of the yield curve By Fergal Smith TORONTO, Feb 8 The Canadian dollar strengthened against the greenback on Friday as stronger-than-expected domestic jobs data helped the currency rebound from an earlier two-week low, but the loonie still lost ground for the week due to rising fears over global trade. Canada added 66,800 jobs in January, the second month of outsized gains in the past three, as services-producing sector jobs soared, Statistics Canada reported. Analysts had forecast a gain of 8,000 positions. Still, the Bank of Canada looks set to leave interest rates unchanged over the coming months, money market data showed, after having hiked by a total of 125 basis points since July 2017. "For the Canadian dollar, we are up on the day but we have given back most of the gains that we've gotten just in response to the jobs data," said Eric Theoret, a currency strategist at Scotiabank. "It is still very much a sentiment driven market and I think right now there is a lot of concerns surrounding trade," Theoret said. U.S. stocks ended near flat as skepticism over the United States and China reaching a trade deal before a looming deadline added to concerns over slowing global growth. Worries about the global economy also weighed on the price of oil, one of Canada's major exports. U.S. crude oil futures settled 0.2 percent lower at $52.72 a barrel. At 4:06 p.m. (2106 GMT), the Canadian dollar was trading 0.3 percent higher at 1.3264 to the greenback, or 75.39 U.S. cents. The currency's strongest level of the session was 1.3233, while it touched its weakest since Jan. 25 at 1.3329. For the week, the loonie fell 1.3 percent. Separate data, from the Canadian Mortgage and Housing Corporation, showed that Canadian housing starts fell less than expected in January to 207,968 units from a revised 213,630 units in December. Canadian government bond prices were lower across much of the yield curve, with the two-year down 1 Canadian cent to yield 1.772 percent and the 10-year falling 5 Canadian cents to yield 1.883 percent. The gap between Canada's 10-year yield and its U.S. equivalent narrowed by 2.6 basis points to a spread of 75.1 basis points in favor of the U.S. bond. (Reporting by Fergal Smith Editing by Susan Thomas and Sandra Maler)

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