CANADA FX DEBT-C$ firms as risk appetite improves

Published 2016-08-04, 09:13 a/m
© Reuters.  CANADA FX DEBT-C$ firms as risk appetite improves
USD/CAD
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CL
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CA2YT=RR
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CA10YT=RR
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* Canadian dollar at C$1.3062, or 76.56 U.S. cents

* Bond prices higher across flatter maturity curve

TORONTO, Aug 4 (Reuters) - The risk-sensitive Canadian dollar edged higher against its U.S. counterpart on Thursday after monetary policy easing by the Bank of England helped support stocks, offsetting a dip in oil prices.

U.S. stock index futures were slightly higher and European shares advanced after the Bank of England cut interest rates for the first time since 2009 and revived its bond-buying program. prices slipped after gains made earlier on Thursday and the previous day as overproduction and large volumes of unsold crude and ample refined products around the world weighed on markets. U.S. crude CLc1 prices were down 0.32 percent to $40.7 a barrel. O/R

At 8:56 a.m. EDT (1256 GMT), the Canadian dollar CAD=D4 was trading at C$1.3062 to the greenback, or 76.56 U.S. cents, slightly stronger than Wednesday's close of C$1.3071, or 76.51 U.S. cents.

The currency's strongest level of the session was C$1.3039, while its weakest was C$1.3089.

Traders were braced for U.S. monthly jobs data due to be released on Friday, which may shift expectations for U.S. interest rates. Canada's international trade data for June and employment report for July are also awaited on Friday. ECONCA

Canadian government bond prices were higher across the maturity curve in sympathy with U.S. Treasuries and British government bonds. The two-year CA2YT=RR price firmed 1 Canadian cent to yield 0.553 percent and the benchmark 10-year CA10YT=RR climbed 21 Canadian cents to yield 1.076 percent.

The curve flattened as the spread between the 2-year and 10-year yields narrowed by 1.7 basis points to 52.3 basis points, indicating outperformance for longer-dated maturities.

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