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Canadian dollar weakens as lower oil prices offset wholesale trade gain

Published 2019-03-21, 09:36 a/m
© Reuters.  Canadian dollar weakens as lower oil prices offset wholesale trade gain
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* Canadian dollar falls 0.2 percent against the greenback

* Price of U.S. oil declines 0.4 percent

* Canadian wholesale trade rises 0.6 percent in January

* Canadian bond prices climb across the yield curve

TORONTO, March 21 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Thursday as lower oil prices and broad-based gains for the greenback offset domestic data showing increased hiring and wholesale trade.

Canadian wholesale trade increased by 0.6 percent in January from December on stronger sales in the machinery, equipment and supplies subsector, Statistics Canada said. Analysts surveyed by Reuters had forecast a 0.5 percent increase. separate report from ADP (NASDAQ:ADP) showed that Canada added 36,200 jobs in February, led by hiring in the professional and business services sector. U.S. dollar .DXY rebounded against a basket of major currencies after declining the day before when the Federal Reserve abandoned projections for any interest rate hikes this year amid signs of an economic slowdown.

U.S. stocks and the price of oil, one of Canada's major exports, fell. But oil held near 2019 highs, supported by a sharp tightening of global stocks, OPEC production cuts and U.S. sanctions on key producers Iran and Venezuela.

U.S. crude oil futures CLc1 were down 0.40 percent at $59.99 a barrel. 9:10 a.m. (1310 GMT), the Canadian dollar CAD=D4 was trading 0.2 percent lower at 1.3337 to the greenback, or 74.98 U.S. cents. The currency traded in a range of 1.3276 to 1.3355.

On Tuesday, Canada's federal budget lavished new spending on middle-class voters ahead of an election in October. But market players have said the measures fell short of the amount of stimulus that might move the Bank of Canada to hike interest rates further. inflation report for February and January retail sales data are due on Friday.

Canadian 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 1.588 percent and the 10-year CA10YT=RR climbed 9 Canadian cents to yield 1.656 percent.

The 10-year yield touched its lowest intraday since June 2017 at 1.635 percent.

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