CANADA FX DEBT-C$ gains as oil rally offsets soft domestic data

Published 2016-11-21, 05:25 p/m
© Reuters.  CANADA FX DEBT-C$ gains as oil rally offsets soft domestic data
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(Adds strategist comment, updates prices to close)

* Canadian dollar ends at C$1.3413, or 74.55 U.S. cents

* Bond prices mixed across the maturity curve

By Alastair Sharp

TORONTO, Nov 21 (Reuters) - The Canadian dollar gained against its U.S. counterpart on Monday as a rally in oil eclipsed weaker-than-expected domestic wholesale trade data.

Oil prices jumped to their highest in three weeks, catching a lift from a broadly weaker U.S. dollar and as OPEC appeared closer to agreeing on an output cut when it meets next week.

"Leading into OPEC, any perception that an agreement can be had to reduce or curtail production is having an impact on oil," said Jack Spitz, managing director of foreign exchange at National Bank Financial.

"It's rumor, it's innuendo, it's not fact but it is creating volatility and it happens to be upward today," he added.

The Canadian dollar CAD=D4 settled at C$1.3413 to the greenback, or 74.55 U.S. cents, stronger than Friday's close of C$1.3513, or 74.00 U.S. cents.

Its strongest level of the day was C$1.3387 and its weakest was C$1.3515.

Brent crude futures LCOc1 settled at $48.90 a barrel, up $2.04, or 4.4 percent. U.S. West Texas Intermediate (WTI) CLc1 gained 4 percent to settle at $47.49 a barrel, up $1.80. O/R

The U.S. dollar .DXY pared some recent gains after rising on Friday to its highest level since April 2003.

The value of Canadian wholesale trade unexpectedly fell by 1.2 percent in September from August, Statistics Canada data showed. Analysts in a Reuters poll had predicted a 0.4 percent gain. Sales in volume terms sank by 1.5 percent. retail sales report for September is due on Tuesday, with analysts eyeing a rebound from a decline in August, in a possible sign that consumers have begun to spend their new child benefit payments from the government. ECONCA

Canadian government bond prices were mixed across the yield curve, with the two-year CA2YT=RR up 0.5 Canadian cent to yield 0.674 percent and the benchmark 10-year CA10YT=RR rising 8 Canadian cents to yield 1.570 percent.

On Wednesday, the 10-year yield touched an 11-month high at 1.602 percent.

Speculators cut bearish bets on the Canadian dollar, according to Commodity Futures Trading Commission data on Friday. Net short Canadian dollar positions fell to 18,599 contracts in the week ended Nov. 15 from an eight-month high of 21,312 in the prior week.

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