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Canadian dollar steady, shakes off GDP decline; set to beat peers in January

Published 2019-01-31, 08:59 a/m
© Reuters.  Canadian dollar steady, shakes off GDP decline; set to beat peers in January
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 near flat against the greenback

* Canadian GDP falls 0.1 percent in November

* Price of U.S. oil rises 0.2 percent

* Bond prices rise across the yield curve

TORONTO, Jan 31 (Reuters) - The Canadian dollar was little changed against its U.S. counterpart on Thursday, maintaining its outperformance this month against its peers as oil prices rose and shrugging off data showed an expected contraction in the domestic economy.

Canada's gross domestic product fell by 0.1 percent in November from October, matching estimates, on declines in the wholesale trade sector, as well as finance and insurance, Statistics Canada said. price of oil, one of Canada's major exports, rose for a third straight day on tighter supply after U.S. sanctions on Venezuelan exports and lower-than-expected U.S. fuel stocks. U.S. crude oil futures CLc1 were up 0.2 percent at $54.35 a barrel. 8:39 a.m. (1339 GMT), the Canadian dollar CAD=D4 was trading nearly unchanged at 1.3142 to the greenback, or 76.09 U.S. cents. The currency, which touched on Wednesday its strongest level in more than two months at 1.3119, traded in a range of 1.3121 to 1.3161.

For the month, the loonie has advanced 3.8 percent, the best performance of G10 currencies, helped by a rebound in oil prices and a recovery in risk appetite. It declined 7.8 percent in 2018.

On Thursday, the Federal Reserve signaled a potential end to its interest rate hike cycle, boosting investor sentiment.

Investors are also anxiously awaiting the outcome of U.S.-China trade talks which began in Washington on Wednesday. government bond prices were higher across the yield curve in sympathy with U.S. Treasuries. The two-year CA2YT=RR rose 2 Canadian cents to yield 1.798 percent and the 10-year CA10YT=RR climbed 13 Canadian cents to yield 1.898 percent.

The 10-year yield touched its lowest intraday since Jan. 4 at 1.889 percent.

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