Breaking News
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

CANADA FX DEBT-C$ hits 1-month high on bets BoC will keep neutral target

ForexJan 07, 2019 16:30
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. CANADA FX DEBT-C$ hits 1-month high on bets BoC will keep neutral target

(Adds strategist quote and details on activity; updates prices)

* Canadian dollar rises 0.6 percent against the greenback

* Loonie touches its strongest level since Dec. 13 at 1.3340

* Price of U.S. oil rises 1.3 percent

* Canadian bond prices gain across a flatter yield curve

By Fergal Smith

TORONTO, Jan 7 (Reuters) - The Canadian dollar strengthened to a one-month high against its broadly weaker U.S. counterpart on Monday, as oil prices climbed and some investors bet the Bank of Canada will stick this week to its plan to raise interest rates to a neutral range.

The Bank of Canada, which has hiked five times since July 2017 to leave its benchmark interest rate at 1.75 percent, is widely expected to refrain from further tightening on Wednesday following recent volatility in stock markets and the price of oil, one of Canada's major exports. BOCWATCH

Still, the central bank said as recently as last month that it will need to raise rates further to a neutral range of between 2.50 percent and 3.50 percent to achieve its inflation target.

"I think there are people thinking that the bank will stick to its guns a little bit, at least in terms of eventually getting back to neutral, and if so that should be supportive of the currency," said Mark Chandler, head of Canadian fixed income and currency strategy at RBC Capital Markets.

Domestic data showed a surprise pick-up in the pace of purchasing activity in December. The Ivey Purchasing Managers Index rose to 59.7 from 57.2 in November, surpassing analysts' expectations for 56.8. 4:07 p.m. (2107 GMT), the Canadian dollar CAD=D4 was trading 0.6 percent higher at 1.3296 to the greenback, or 75.21 U.S. cents. The currency, which rose nearly 2 percent last week, touched its strongest level since Dec. 7 at 1.3280.

Gains for the loonie came as the price of oil rebounded further from 1-1/2-year lows reached in December, on support from OPEC production cuts and steadying equities markets. U.S. crude oil futures CLc1 settled 1.2 percent higher at $48.52 a barrel. advanced for a second straight session as the resumption of U.S.-China trade talks helped ease concerns that have pummeled the market in recent months, while the U.S. dollar .DXY was pressured by growing expectations the U.S. Federal Reserve will either pause or halt its interest rate hike cycle. government bond prices were lower across a flatter yield curve in sympathy with U.S. Treasuries, with the two-year CA2YT=RR down 5 Canadian cents to yield 1.881 percent and the 10-year CA10YT=RR falling 15 Canadian cents to yield 1.947 percent.

Last Thursday, the 10-year yield hit its lowest since August 2017 at 1.814 percent.

CANADA FX DEBT-C$ hits 1-month high on bets BoC will keep neutral target
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email