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Loonie steadies as wholesale trade lifts Canada's economy

Published 2019-11-25, 03:51 p/m
© Reuters.  Loonie steadies as wholesale trade lifts Canada's economy
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* Wholesale trade rises by 1% in September

* Price of U.S. oil rises 0.5%

* Canadian bond prices little changed across the yield curve

By Fergal Smith

TORONTO, Nov 25 (Reuters) - The Canadian dollar was unchanged against its U.S. counterpart on Monday, steadying after it declined last week, as strong domestic data offset evidence that a strike at Canada's biggest railroad was taking a toll on the country's economy

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.

The strike at Canadian National Railway Co CNR.TO became a bigger threat to economic growth in the fourth quarter. Fertilizer company Nutrien Ltd NTR.TO said it was planning production cutbacks, while grain exporters warned buyers they could not fulfill sales terms. have estimated a prolonged strike could cost the Canadian economy billions of dollars.

At 3:26 p.m. (2026 GMT), the Canadian dollar CAD=D4 was trading unchanged at 1.3304 to the greenback, or 75.17 U.S. cents. The currency, which declined 0.6% last week, traded in a range of 1.3286 to 1.3319.

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 .WORLD rallied 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 rose 0.5% to $58.04 a barrel, approaching last Friday's near two-month high. government bond prices were little changed across the yield curve, with the two-year CA2YT=RR down 1 Canadian cent to yield 1.585% and the 10-year CA10YT=RR flat to yield 1.473%.

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