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CANADA FX DEBT-C$ posts a fresh 2-week high in the wake of Fed rate hike

Published 2017-03-16, 09:44 a/m
© Reuters.  CANADA FX DEBT-C$ posts a fresh 2-week high in the wake of Fed rate hike
USD/CAD
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CA2YT=RR
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CA10YT=RR
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DXY
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* Canadian dollar at C$1.3307, or 75.15 U.S. cents

* Loonie touches its strongest since Feb. 28 at C$1.3277

* Bond prices fell across the yield curve

TORONTO, March 16 (Reuters) - The Canadian dollar posted a fresh two-week high against its U.S. counterpart on Thursday before consolidating sharp gains since the Federal Reserve decided to hike interest rates the day before.

Prices of oil, one of Canada's major exports, were up for a second day, helped by U.S. data showing crude inventories had dipped after rising for nine weeks. U.S. dollar .DXY weakened against a basket of major currencies after Fed officials stuck to their outlook for two more rate hikes this year and three in 2018, a more gradual path than some investors had expected. 9:17 a.m. EDT (1317 GMT), the Canadian dollar CAD=D4 traded at C$1.3307 to the greenback, or 75.15 U.S. cents, unchanged from Wednesday's close.

The currency's weakest level was C$1.3321, while it touched its strongest since Feb. 28 at C$1.3277.

Foreign investment in Canadian securities dropped to its lowest in more than a year in January, as nonresidents bought bonds while selling stocks and money market paper, Statistics Canada said. government bond prices were lower across the yield curve in sympathy with U.S. Treasuries. The two-year CA2YT=RR fell 2.5 Canadian cents to yield 0.818 percent and the 10-year CA10YT=RR declined 34 Canadian cents to yield 1.803 percent.

Yields dropped on Wednesday after the Fed did not flag an accelerated pace of monetary tightening.

Canadian manufacturing sales data is due on Friday. Sales are expected to have decreased by 0.2 percent in January after rising for the previous two months. ECONCA

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