CANADA FX DEBT-C$ at weakest in 2 weeks as oil slides, trade data mixed

Published 2017-02-07, 05:02 p/m
© Reuters. CANADA FX DEBT-C$ at weakest in 2 weeks as oil slides, trade data mixed
USD/CAD
-
LCO
-
CL
-
CA2YT=RR
-
CA10YT=RR
-

(Adds strategist comment, updates prices to close)

* Canadian dollar at C$1.3167, or 75.95 U.S. cents

* Bond prices mixed across the maturity curve

By Alastair Sharp

TORONTO, Feb 7 (Reuters) - The Canadian dollar hit its weakest close in more than two weeks against a broadly higher U.S. counterpart on Tuesday, with falling oil prices and concern about some details of a trade surplus report weighing.

The currency also suffered as investors reassessed the prospect of a faster pace to U.S. interest rate hikes after Philadelphia Federal Reserve Bank President Patrick Harker said late on Monday he would be open to raising rates at the central bank's March meeting if growth in jobs and wages continues.

"Even though he is a known hawk, the fact that he came out and communicated his preference for the three-hike path and maintain that March was a live meeting was enough to wake people up," said Eric Theoret, a currency strategist at Scotiabank.

Prices for oil CLc1 LCOc1 , a major Canadian export, fell more than 1 percent as growing evidence of a revival in U.S. shale production offset lower output by OPEC and other exporters. O/R

The Canadian dollar CAD=D4 settled at C$1.3167 to the greenback, or 75.95 U.S. cents, much weaker than the Bank of Canada's close on Monday of C$1.3087, or 76.41 U.S. cents and its weakest settlement since Jan. 23.

The currency traded as strong as C$1.3076 early in the session before weakening to as much as C$1.3213.

Canada posted a C$923 million trade surplus in December, thanks largely to booming crude oil exports, Statistics Canada said. November's surplus was also revised sharply higher. while overall exports rose by 0.8 percent in December, export volumes actually fell by 1.4 percent.

"On the headline it looks great, when you dig into the details, whether it's the breadth of the export growth or the composition of price versus volume, it doesn't provide as much confidence," Scotia's Theoret said.

The loonie has made strong gains so far this year, but that upsurge will likely peter out over the coming months as an expected widening gap between steady interest rates in Canada and rising U.S. rates eclipses higher oil prices, a Reuters poll found. government bond prices were mixed across the maturity curve, with the two-year CA2YT=RR price down half a Canadian cent to yield 0.740 percent and the benchmark 10-year CA10YT=RR up 9 Canadian cents to yield 1.690 percent.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.