CANADA FX DEBT-C$ extends weekly losing streak as yield advantage narrows

- Advertisement -


 (Adds strategist quotes and details throughout; updates prices)
    * Canadian dollar touches its weakest since Oct. 6 at 1.2604
    * For the week, the loonie declines 0.7%
    * Price of U.S. oil settles nearly 1% lower
    * Canadian bond yields ease across a flatter curve

    By Fergal Smith
    TORONTO, Nov 12 (Businesshala) - The Canadian dollar edged higher
against the greenback on Friday but held near its weakest level
in more than five weeks, which it hit as oil prices fell and the
gap in yields between Canadian and U.S. bonds receded.
    The loonie        was trading 0.2% higher at 1.2546 to the
greenback, or 79.71 U.S. cents, after touching its weakest
intraday level since Oct. 6 at 1.2604.
    For the week, the currency was down 0.7%, its fourth
straight weekly decline.
    "Softer crude prices and some marginal narrowing in
CAD-positive yield spreads have weighed on CAD sentiment this
week," strategists at Scotiabank, including Shaun Osborne, said
in a note.
    The gap between Canadian and U.S. 2-year yields narrowed by
2.6 basis points to 47.3 basis points in favor of the Canadian
bond. Earlier this month, it was as wide as 60 basis points.
    The declining yield advantage comes after data this week
showed an acceleration in U.S. inflation, which raised
expectations that the Federal Reserve would bring forward an
increase to interest rates.
    The prospect of more rapid Fed tightening has boosted the
U.S. dollar        and weighed on the price of oil, one of
Canada's major exports.                         
    U.S. crude oil futures        settled nearly 1% lower at
$80.79 a barrel.
    Canada's COVID-19 cases are creeping higher as cold weather
approaches, health officials said, and more restrictive public
health measures may be needed if cases continue to climb.
            
    Canadian government bond yields were lower across a flatter
curve. The 10-year yield             eased 2.6 basis points to 
1.671%, after on Wednesday touching its highest intraday level
in nearly one week at 1.706%.

 (Reporting by Fergal Smith; Editing by Kevin Liffey and Grant
McCool)
  
- Advertisement -

- Advertisement -

,

- Advertisement -

Stay on top - Get the daily news in your inbox

DMCA / Correction Notice

Recent Articles

Related Stories

Stay on top - Get the daily news in your inbox