- December 4, 2018
- Posted by: Trading
- Category: News
* Canadian dollar notches largest gain in 2 months
* Loonie touches strongest level since Nov. 20
* U.S. oil price jumps nearly 4 percent
* Canadian bond prices rise across flatter yield curve
By Fergal Smith
TORONTO, Dec 3 (Reuters) – The Canadian dollar strengthened to its highest in nearly two weeks against its U.S. counterpart on Monday after the United States and China agreed to a 90-day truce in their trade war, boosting the outlook for the global economy.
Canada exports many commodities, including oil, and runs a current account deficit, so its economy could benefit if prospects for global trade improve.
“The outlook for global growth in 2019 and beyond depends on how well the U.S. and China are getting along and this was a positive outcome,” said Adam Button, chief currency analyst at ForexLive. “The Canadian dollar is a reflection of the tentative optimism.”
Stocks and the price of oil climbed after U.S. President Donald Trump and Chinese President Xi Jinping agreed to hold off on new tariffs during talks in Argentina on Saturday, and ahead of a meeting this week of the Organization of the Petroleum Exporting Countries that is expected to cut supply. crude prices settled nearly 4 percent higher at $52.95 a barrel, while the discount on Western Canada Select was slashed, after Alberta Premier Rachel Notley said on Sunday the government would force producers to cut output by 8.7 percent until excess crude in storage is reduced. news of a (Canadian) production cut was dramatic and mostly unexpected,” Button said. “A significant amount of pressure has been relieved from small and medium sized Canadian oil companies.”
At 4:46 p.m. (2146 GMT), the Canadian dollar CAD=D4 was trading 0.6 percent higher at 1.3199 to the greenback, or 75.76 U.S. cents, its biggest gain since Oct. 1. The currency touched its strongest level since Nov. 20 at 1.3160.
Gains for the came ahead of a Bank of Canada policy decision on Wednesday. A strong majority of economists polled by Reuters said the central bank will wait until early next year before it raises interest rates again and that two more rate rises will follow by end-2019. manufacturing sector expanded in November at the fastest pace in three months, boosted by a pickup in new orders and the strongest job creation in at least eight years, data showed on Monday. trade report for October is due on Thursday and the November employment report is due on Friday.
Canadian government bond prices were higher across a flatter yield curve. The 10-year yield touched its lowest intraday level since Sept. 6 at 2.234 percent.
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