CANADA FX DEBT-C$ dips, consolidating gains linked to trade optimism

Published 2018-07-26, 09:35 a/m
© Reuters.  CANADA FX DEBT-C$ dips, consolidating gains linked to trade optimism
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* Canadian dollar at C$1.3054, or 76.60 U.S. cents

* Bond prices higher across a flatter yield curve

* Canada-U.S. 10-year spread widens by 3.5 basis points

TORONTO, July 26 (Reuters) - The Canadian dollar edged lower against the greenback on Thursday, consolidating its gains driven by trade optimism from the day before, as data pointing to solid U.S. business spending boosted the greenback.

The U.S. dollar .DXY rebounded from a two-week low intraday against a basket of major currencies after data showed new orders for key U.S.-made capital goods increased more than expected in June and shipments surged. 9:21 a.m. EDT (1321 GMT), the Canadian dollar CAD=D4 was trading 0.1 percent lower at C$1.3054 to the greenback, or 76.60 U.S. cents.

On Wednesday, the currency touched its strongest in nearly six weeks at C$1.3025 after Canadian and Mexican policymakers said they were optimistic about prospects for the North American Free Trade Agreement and a breakthrough in U.S.-EU trade talks. runs a current account deficit, so its economy could be hurt if the flow of trade or capital slows.

The loonie touched the C$1.3025 level again on Thursday, while its weakest was C$1.3061.

U.S. crude oil futures CLc1 dipped 0.1 percent to $69.25 a barrel even as Saudi Arabia suspended its oil shipments through a Red Sea strait in response to an attack on two of the country's tankers. is one of Canada's major exports.

Canadian government bond prices were higher across a flatter yield curve, with the two-year CA2YT=RR up 1 Canadian cent to yield 2.055 percent and the 10-year CA10YT=RR rising 10 Canadian cents to yield 2.285 percent.

The gap between Canada's 10-year yield and its U.S. equivalent widened 3.5 basis points to a spread of 67.5 basis points in favor of the U.S. bond.

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