CANADA FX DEBT-C$ scores biggest gain in two months as economy grows By Reuters


© Reuters. CANADA FX DEBT-C$ scores biggest gain in two months as economy grows

* Canadian dollar rises 0.5 percent against the greenback

* Canada’s economy grows 0.2 percent in July

* Bond prices trade mixed across a flatter yield curve

* Canada-U.S. 2-year spread narrows by 2.6 basis points

By Fergal Smith

TORONTO, Sept 28 (Reuters) – The Canadian dollar notched its largest gain in two months against the greenback on Friday after data showing faster-than-expected growth of the domestic economy boosted expectations of an interest rate hike from the Bank of Canada in October.

At 3:55 p.m. (1955 GMT), the Canadian dollar CAD=D4 was trading 0.9 percent higher at 1.2923 to the greenback, or 77.38 U.S. cents, its biggest since July 20.

It left the as the best performing G10 currency on Friday despite the expected release of the text of the Trump administration’s trade agreement with Mexico. For the week, the Canadian dollar was nearly unchanged.

U.S. President Donald Trump, who complained this week that talks to modernize the North American Free Trade Agreement (NAFTA) were moving too slowly, has threatened to leave Canada out of the deal if it does not sign up by Sunday. He has also proposed slapping auto tariffs on Canada. have a lot of uncertainty on trade still,” said Nathan Janzen, a senior economist at Royal Bank of Canada. “At the same time, the domestic economic backdrop still looks plenty strong enough to warrant higher interest rates.”

Canada’s economy grew 0.2 percent in July, stronger than the 0.1 percent increase that analysts had forecast, Statistics Canada data indicated. figures are significant because the Bank of Canada earlier this month forecast that temporary factors would weigh on third-quarter growth.

Chances of an interest rate increase next month by the central bank climbed to more than 80 percent from 77 percent before the data, the overnight index swaps market indicated. BOCWATCH

The Bank of Canada will continue to raise interest rates gradually, Governor Stephen Poloz said on Thursday. price of oil, one of Canada’s major exports, rose as U.S. sanctions on Tehran squeezed Iranian crude exports, tightening supply even as other key exporters increased production. crude oil futures settled 1.9 percent higher at $73.46 a barrel.

The U.S. dollar climbed to a two-week peak versus a currency basket as concerns about the Italian budget weighed on the euro. government bond prices were mixed across a flatter yield curve, with the two-year down 2 Canadian cents to yield 2.212 percent and the 10-year rising 2 Canadian cents to yield 2.421 percent.

The gap between the 2-year yield and its U.S. equivalent narrowed by 2.8 basis points to a spread of 60.7 basis points in favor of the U.S. bond.

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 !!