CANADA FX DEBT-C$ hits 2-week high as greenback hurt by U.S. tax worries

Published 2017-11-09, 05:17 p/m
© Reuters.   CANADA FX DEBT-C$ hits 2-week high as greenback hurt by U.S. tax worries
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$1.2677, or 78.88 U.S. cents

* Loonie touches its strongest in two weeks

* Bond prices mostly retreat across the yield curve (Updates figures, adds strategist comments)

By Solarina Ho

TORONTO, Nov 9 (Reuters) - The Canadian dollar strengthened on Thursday to a two-week high against a broadly weaker U.S. dollar, which came under pressure as investors worried about a delay on corporate tax cuts.

The U.S. dollar .DXY edged lower against a basket of major currencies as Senate Republicans were set to announce a tax cut plan that would push back reducing the corporate tax to 20 percent from 35 percent until 2019. more really disappointment on the U.S. dollar today," said Amo Sahota, director at Klarity FX in San Francisco.

"Equities ... got floored by the Senate's tax reform. Treasuries are off a little bit as well. All this has kind of weighed on USD/CAD."

At 4:00 p.m. ET (2100 GMT), the Canadian dollar CAD=D4 was up 0.4 percent at C$1.2677 to the greenback, or 78.88 U.S. cents.

The currency's weakest level of the session was C$1.2740, while it touched its strongest since Oct. 25 at C$1.2668.

"The one we're watching really closely is oil and commodities in general," said Sahota.

Prices of oil, one of Canada's major exports, were supported by major exporter supply cuts and concern about political uncertainty in Saudi Arabia, but analysts said the market could be vulnerable to a sell-off after several months of gains. crude CLc1 settled at $57.17 a barrel, up 0.63 percent.

The loonie added to gains it made after comments on Tuesday by Bank of Canada Governor Poloz.

Poloz maintained a neutral tone on the next interest rate move in a speech and press conference, repeating the central bank's message that it was monitoring wage growth and inflation, as well as how the economy was adjusting to the two rate hikes in July and September. home prices in Canada rose 0.2 percent in September from August, mostly on the strength of the Kelowna and Vancouver markets, Statistics Canada said on Thursday. The year-on-year gain was steady at 3.8 percent. government bond prices were mostly lower across the yield curve in sympathy with U.S. Treasuries. The two-year CA2YT=RR was down 5 Canadian cents to yield 1.452 percent, and the 10-year CA10YT=RR declined 15 Canadian cents to yield 1.937 percent.

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