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CANADA FX DEBT-C$ hits a 6-week low on trade tensions, lower exports

Published 2019-08-02, 10:57 a/m
© Reuters.  CANADA FX DEBT-C$ hits a 6-week low on trade tensions, lower exports
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 falls 0.2% against the greenback

* Canada's June exports fall 5.1%

* Price of U.S. oil increases by 3.3%

* Bond prices move higher across the yield curve

TORONTO, Aug 2 (Reuters) - The Canadian dollar weakened to a six-week low against its U.S. counterpart on Friday after domestic data showed a decrease in exports and as investors weighed the prospect of additional U.S. tariffs on Chinese goods.

Canada posted a narrower trade surplus in June as exports fell by 5.1%. It was the first drop for exports since February and reversed a big increase in May. exports many commodities, including oil, so its economy could be hurt by an escalation of trade tensions. On Thursday, U.S. President Donald Trump said he would slap 10% tariffs on $300 billion of Chinese imports starting Sept. 1. 10:21 a.m. (1421 GMT), the Canadian dollar CAD=D4 was trading 0.2% lower at 1.3245 to the greenback, or 75.50 U.S. cents. The currency hit its lowest intraday since June 20 at 1.3265.

Meanwhile, the price of oil, one of Canada's major exports, rose on Friday, regaining some ground after its biggest fall in years on the escalation of trade tensions. U.S. crude oil futures CLc1 were up 3.3% at $55.73 a barrel. government bond prices were higher across the yield curve in sympathy with U.S. treasuries. The two-year CA2YT=RR rose 4 Canadian cents to yield 1.456% and the 10-year CA10YT=RR was up 9 Canadian cents to yield 1.387%.

The 10-year yield hits its lowest intraday level since November 2016 at 1.355%.

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