CANADA FX DEBT-C$ surrenders gains after reaching 9-day high

Published 2017-03-30, 05:04 p/m
© Reuters.  CANADA FX DEBT-C$ surrenders gains after reaching 9-day high
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(Adds strategist quotes and updates prices)

* Canadian dollar ends at C$1.3334, or 75.00 U.S. cents

* Bond prices lower across the yield curve

By Fergal Smith

TORONTO, March 30 (Reuters) - The Canadian dollar surrendered early gains as it closed unchanged on Thursday after posting a nine-day high against its U.S. counterpart, ahead of Friday's release of the country's gross domestic product data for January.

U.S. crude CLc1 prices settled 84 cents higher at $50.35 a barrel after Kuwait backed an extension of Organization of the Petroleum Exporting Countries production cuts to reduce a global glut. big story is oil back above 50 ... it is a huge relief for CAD," said Greg Anderson, global head of foreign exchange strategy in New York.

Oil is one of Canada's major exports.

The U.S. dollar .DXY rose after U.S. fourth-quarter gross domestic product growth figures were revised higher and softer-than-expected readings for German inflation weighed on the euro. investors took the opportunity to sell euros against the Canadian dollar, Anderson said.

"When euro started to sell off hard today, it just added wind to CAD sails."

The Canadian dollar CAD=D4 ended at C$1.3334 to the greenback, or 75.00 U.S. cents, little changed from Wednesday's close of C$1.3333, or 75.00 U.S. cents.

The currency's weakest level of the session was C$1.3347, while it touched its strongest since March 21 at C$1.3278.

The Wall Street Journal reported that President Donald Trump's administration was signaling to Congress that it would seek mostly modest changes to the North American Free Trade Agreement in upcoming negotiations with Mexico and Canada. exports about 75 percent of its exports to the United States, and traders are closely following developments in U.S. trade policy.

In domestic data, producer prices edged up 0.1 percent in February from January, which was less than the 0.3 percent increase analysts had expected. Still, the year-on-year gain picked up to 3.5 percent from 2.5 percent. Friday, Canada issues January GDP data, expected by economists to rise 0.3 percent. That could set the stage for a stronger performance in the first quarter than initially expected. ECONCA

Canadian government bond prices were lower across the yield curve, with the two-year CA2YT=RR down 4.5 Canadian cents to yield 0.748 percent, its highest since March 24, and the 10-year CA10YT=RR falling 33 Canadian cents to yield 1.632 percent.

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