CANADA FX DEBT-C$ retreats from 10-day high amid trade war worries

Published 2018-03-22, 09:39 a/m
© Reuters.  CANADA FX DEBT-C$ retreats from 10-day high amid trade war 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$1.2908, or 77.47 U.S. cents

* Loonie touches its strongest since March 12 at C$1.2830

* Oil prices fall 0.8 percent

* Bond prices higher across the yield curve

TORONTO, March 22 (Reuters) - The Canadian dollar was little changed against its U.S. counterpart on Thursday, pulling back from an earlier 10-day high, as oil prices fell and investors worried about a potential global trade war.

The market braced for an announcement from U.S. President Donald Trump of tariffs of as much as $60 billion on Chinese imports. stocks slipped, with some investors anticipating that China could retaliate. Canada's commodity-linked economy could be hurt if global trade slowed. price of oil, one of Canada's major exports, fell as investors booked profits after this week's rally, but losses were limited by the ongoing efforts of some major producers to curb supplies. crude CLc1 prices were down 0.8 percent at $64.66 a barrel.

At 9:26 a.m. ET (1326 GMT), the Canadian dollar CAD=D4 was trading nearly unchanged at C$1.2908 to the greenback, or 77.47 U.S. cents.

The currency's weakest level of the session was C$1.2914, while it touched its strongest since March 12 at C$1.2830.

On Wednesday, the loonie posted its biggest gain against the U.S. dollar in nearly four months, buoyed by optimism about a North American Free Trade Agreement deal.

Bank of Canada Senior Deputy Governor Carolyn Wilkins is due to speak on financial stability. The central bank will release her prepared remarks at 2:45 p.m. ET (1845 GMT). Domestic inflation data for February is due on Friday.

Canadian government bond prices were higher across a flatter yield curve in sympathy with U.S. Treasuries. The two-year CA2YT=RR rose 5 Canadian cents to yield 1.842 percent and the 10-year CA10YT=RR climbed 50 Canadian cents to yield 2.196 percent.

On Wednesday, the 2-year yield touched its highest intraday in nearly seven years at 1.909 percent.

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