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CANADA FX DEBT-C$ rises as Warren Buffett takes stake in Canada's oil patch

ForexFeb 15, 2019 17:00
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© Reuters. CANADA FX DEBT-C$ rises as Warren Buffett takes stake in Canada's oil patch

(Adds strategist quotes and details throughout, updates prices)

* Canadian dollar rises 0.4 percent against the greenback

* For the week, the loonie climbs 0.3 percent

* Price of U.S. oil rises 2.2 percent

* Canadian home sales rise 3.6 percent in January

* Canadian bond prices fall across the yield curve

By Fergal Smith

TORONTO, Feb 15 (Reuters) - The Canadian dollar rallied against the greenback on Friday as domestic data eased fears about a weak housing market and after a bet by Warren Buffett on one of Canada's major energy companies that could boost sentiment in the country's oil patch.

Warren Buffett's Berkshire Hathaway (NYSE:BRKa) Inc BRKa.N said on Thursday it had taken a fresh stake in Suncor Energy Inc SU.TO for the second time in about six years, sending the company's shares nearly four percent higher on Friday.

"Warren Buffett planting his flag in the Canadian oil patch is a promising sign that we may have reached a bottom in Canadian energy," said Adam Button, chief currency analyst at ForexLive.

The Bank of Canada expected in January investment in the energy sector to contract because of low oil prices and production curtailments in Alberta, as it signaled the pace of future interest rate hikes could be more gradual. central bank also worried about a weak housing market, after activity slowed at the end of 2018.

Data on Friday from the Canadian Real Estate Association showed home sales in January remained below levels posted one year ago, but that activity rose 3.6 percent from December. housing data was better than expected and "calmed the nerves" of investors, Button said.

At 3:56 p.m. EST (2056 GMT), the Canadian dollar CAD=D4 was trading 0.4 percent higher at 1.3246 to the greenback, or 75.49 U.S. cents.

The currency on Thursday touched its weakest intraday level in nearly three weeks at 1.3340, but still finished the week up 0.3 percent.

Gains for the loonie came as stocks were boosted by rising hopes the United States and China can hammer out an agreement resolving their protracted trade war. is a major producer of commodities, including oil, so its economy could benefit from reduced global economic uncertainty.

U.S. crude oil futures CLc1 settled 2.2 percent higher at $55.59 a barrel as this week's announcement of a higher-than-expected supply cut by Saudi Arabia encouraged investors. from Statistics Canada showed foreign investors sold a net C$18.96 billion in Canadian securities in December, led by a record divestment in bonds. This was the highest divestment since October 2007. government bond prices were lower across the yield curve in sympathy with U.S. Treasuries. The 10-year CA10YT=RR fell 16 Canadian cents to yield 1.895 percent.

Canada's bond market will be closed on Monday for the Family Day holiday.

CANADA FX DEBT-C$ rises as Warren Buffett takes stake in Canada's oil patch
 

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