CANADA FX DEBT-C$ rallies as hotter inflation boosts rate hike chances By Reuters



© Reuters. CANADA FX DEBT-C$ rallies as hotter inflation boosts rate hike chances

* Canadian dollar at C$1.2873, or 77.63 U.S. cents

* Loonie touches its strongest since March 12 at C$1.2824

* Oil rises 2.5 percent

* Bond prices lower across a flatter yield curve

By Fergal Smith

TORONTO, March 23 (Reuters) – The Canadian dollar strengthened to an 11-day high against the greenback on Friday as oil prices rose and hotter-than-expected domestic inflation data raised prospects of a further Bank of Canada interest rate hike as soon as next month.

The annual inflation rate rose to 2.2 percent, a three-year high, from 1.7 percent in January. Economists had forecast a rate of 2.0 percent. Bank of Canada’s three measures of core inflation also all strengthened.

“Clearly we had a big bid for the Canadian dollar on the back of that CPI print,” said Christian Lawrence, senior market strategist at Rabobank. “The move in CAD is about more (chance) of a hike being priced in for the April meeting.”

The Bank of Canada has raised rates three times since July even as it worried about a more uncertain trade outlook. Chances of a hike in April rose to more than 40 percent from 35 percent on Thursday, the overnight index swaps market indicated. BOCWATCH

Still, separate data showing a weaker-than-expected 0.3 percent rise in January retail sales added to the picture of a domestic economy that has lost some momentum in recent months.

The price of oil, one of Canada’s major exports, rose on prospects of extended supply cuts by major producers. U.S. crude oil futures settled 2.5 percent higher at $65.88 a barrel. raised bullish bets on the Canadian dollar for the first time in six weeks, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed. As of March 20, net long positions had increased to 24,560 contracts from 19,420 a week earlier.

At 4 p.m. ET (2000 GMT), the Canadian dollar CAD=D4 was trading 0.5 percent higher at C$1.2873 to the greenback, or 77.63 U.S. cents. The currency touched its strongest since March 12 at C$1.2824.

The U.S. dollar hovered near a one-month low against a basket of major currencies as investors worried about escalating trade tensions between the United States and China. commodity-linked economy could be hurt if global trade slowed. But the has benefited this week from optimism about a deal to revamp the North American Free Trade Agreement. For the week, the loonie rose 1.8 percent, its biggest gain since September.

Canadian government bond prices were lower across a flatter yield curve, with the two-year down 6 Canadian cents to yield 1.857 percent and the 10-year falling 14 Canadian cents to yield 2.196 percent.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Source link



Leave a Reply

error: Content is protected !!