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Loonie steadies as wholesale trade lifts Canada's economy

Published 2019-11-25, 09:59 a/m
© Reuters.  Loonie steadies as wholesale trade lifts Canada's economy
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* Canadian dollar trades near flat against the greenback

* Wholesale trade rises by 1% in September

* Bond prices dip across a flatter yield curve

By Fergal Smith

TORONTO, Nov 25 (Reuters) - The Canadian dollar was little changed against its U.S. counterpart on Monday as domestic data showing increased wholesale trade offset signs that a strike at Canada's biggest railroad was set to continue.

Canadian wholesale trade rose by 1.0% in September from August, much stronger than the 0.4% gain that was expected. Sales grew by 0.9% in volume terms. trade provided a nice lift to September economic activity in Canada that otherwise had looked fairly tepid," Avery Shenfeld, chief economist at CIBC Capital Markets, said in a note.

"Markets don't typically react to this series, but might take note of the firmer real GDP print later this week that incorporates these data," Shenfeld said.

Canada's gross domestic product data for the third quarter is due on Friday, which could help guide expectations for next week's Bank of Canada interest rate decision.

Labor union Teamsters Canada said it has made no progress in reaching an agreement with Canadian National Railway Co CNR.TO . Economists have estimated a prolonged strike could cost the Canadian economy billions of dollars. 9:49 a.m. (1449 GMT), the Canadian dollar CAD=D4 was trading nearly unchanged at 1.3298 to the greenback, or 75.20 U.S. cents. The currency, which declined 0.6% last week, traded in a range of 1.3286 to 1.3316.

The loonie has been pressured since October by a more dovish stance from the Bank of Canada. Last Wednesday, it hit a near six-week low at 1.3328.

Investors have cut bullish bets on the Canadian dollar, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed. As of Nov. 19, net long positions in the currency had fallen to 28,865 contracts from 42,373 in the prior week. shares staged a cautious rally on Monday as hopes rose for a trade deal between the United States and China. China said on Sunday it would seek to improve protections for intellectual property rights. is a major exporter of commodities, including oil, so its economy could benefit from a reduction in trade uncertainty.

U.S. crude oil futures CLc1 were down 0.1% to $57.73 a barrel, steadying after they notched on Friday a near two-month high intraday at $58.74. government bond prices were lower across a flatter yield curve, with the two-year CA2YT=RR down 3 Canadian cents to yield 1.596% and the 10-year CA10YT=RR falling 2 Canadian cents to yield 1.475%.

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