Cyber Monday Deal: Up to 60% off InvestingProCLAIM SALE

CANADA FX DEBT-C$ pares gains as oil turns lower

Published 2016-08-02, 05:19 p/m
© Reuters.  CANADA FX DEBT-C$ pares gains as oil turns lower

(Adds analyst comments and details on RBC PMI, updates prices)

* Canadian dollar ends at C$1.3102, or 76.32 U.S. cents

* Bond prices lower across steeper maturity curve

By Fergal Smith

TORONTO, Aug 2 (Reuters) - The commodity-linked Canadian dollar pared gains against its U.S. counterpart on Tuesday as oil turned lower, while weaker-than-expected U.S. data last week weighed on the greenback.

The U.S. dollar .DXY fell to a five-week low against a basket of major currencies. The greenback has been sold steadily since surprisingly weak U.S. second-quarter growth numbers last week. boost from a weak U.S. dollar helped support oil early in the session. But U.S. crude oil futures CLc1 settled down 55 cents at $39.51 a barrel as persistent worries of a glut weighed. O/R

"It looks like it (the Canadian dollar) was just really following the oil price," said Ian Gordon, FX strategist at Bank of America Merrill Lynch (NYSE:BAC).

The Canadian dollar CAD=D4 ended at C$1.3102 to the greenback, or 76.32 U.S. cents, stronger than Monday's Reuters close of C$1.3120, or 76.22 U.S. cents.

The loonie's official close on Friday before a civic holiday on Monday was C$1.3056, or 76.59 U.S. cents.

The currency's strongest level of the session was C$1.3005, while its weakest was C$1.3143.

Speculators increased bullish bets on the Canadian dollar for the fifth straight week, Commodity Futures Trading Commission data showed on Friday. Net long Canadian dollar positions rose to 23,180 contracts in the week ended July 26 from 22,068 contracts in the prior week. contrast, Bank of America Merrill Lynch's proprietary data shows that non-leveraged accounts have reduced their exposure to the Canadian dollar, Gordon said.

Canadian government bond prices were lower across a steeper maturity curve in sympathy with U.S. Treasuries. The two-year CA2YT=RR bond dipped 3.5 Canadian cents to yield 0.558 percent and the benchmark 10-year CA10YT=RR declined 47 Canadian cents to yield 1.077 percent.

On Friday, the 10-year yield hit a two-week low at 1.023 percent.

Losses for global bond markets came as Japan's cabinet approved a fiscal stimulus package on Tuesday to revive the country's flagging economy. Last week, the Bank of Japan announced further easing steps that disappointed investors.

The RBC Canadian Manufacturing Purchasing Managers' Index (PMI), a measure of manufacturing business conditions, barely rose last month to a seasonally adjusted 51.9 from 51.8 in June. international trade data for June and employment report for July are awaited on Friday. ECONCA

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.