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Loonie recovers after surprise jump in wholesale trade

Published 2019-09-23, 09:33 a/m
© Reuters.  Loonie recovers after surprise jump in wholesale trade
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* Canadian dollar trades near flat against the greenback

* Canadian wholesale trade increases by 1.7% in July

* Price of U.S. oil gains 0.3%

* Canada's 10-year yield touches a near 2-week low at 1.339%

By Fergal Smith

TORONTO, Sept 23 (Reuters) - The Canadian dollar was little changed against its U.S. counterpart on Monday, with the currency clawing back its earlier decline after domestic data showed an unexpected jump in July wholesale trade.

Canadian wholesale trade increased by 1.7% in July from June on stronger sales in the personal and household goods subsector, as well as motor vehicles and parts, Statistics Canada said. Analysts had forecast a 0.1% decrease.

The data, which included a 1.9% rise in sales volumes, "will provide a much needed lift to what otherwise looks like a lacklustre GDP print for July," Avery Shenfeld, chief economist at CIBC Capital Markets, said in a note.

Speculators have raised their bullish bets on the Canadian dollar to the highest in six weeks, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed on Friday. As of Sept. 17, net long positions had increased to 19,823 contracts from 11,523 in the prior week. 9:08 a.m. (1308 GMT), the Canadian dollar CAD=D4 was trading nearly unchanged at 1.3263 to the greenback, or 75.40 U.S. cents. The currency, which rose 0.2% last week, traded in a range of 1.3252 to 1.3305.

The U.S. dollar .DXY rose against a basket of major currencies after weaker-than-expected German flash purchasing managers' index survey data pressured the euro. of European economic weakness and the prospect of a faster-than-expected full restoration of Saudi oil output weighed on the price of oil, one of Canada's major exports. Still, U.S. crude oil futures CLc1 reversed an earlier decline, rising 0.3% to $58.24 a barrel government bond prices were higher across a flatter yield curve in sympathy with U.S. Treasuries and German Bunds. The two-year CA2YT=RR rose 4.5 Canadian cents to yield 1.549% and the 10-year CA10YT=RR was up 28 Canadian cents to yield 1.357%.

The 10-year yield touched its lowest intraday level since Sept. 10 at 1.339%.

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