Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

CANADA FX DEBT-C$ weakens as markets fret about global growth outlook

Published 2018-12-14, 05:04 p/m
Updated 2018-12-14, 05:10 p/m
© Reuters.  CANADA FX DEBT-C$ weakens as markets fret about global growth outlook

* Canadian dollar falls 0.2 percent against the greenback

* Loonie falls 0.4 percent for the week

* Canadian bond prices rise across the yield curve

* Canada-U.S. 10-year spread widens by 4.2 basis points

By Fergal Smith

TORONTO, Dec 14 (Reuters) - The Canadian dollar lost ground against its broadly stronger U.S. counterpart on Friday as investors worried about signs of slower global growth and braced for a potential interest rate hike next week from the Federal Reserve.

At 4:12 p.m. (2112 GMT), the Canadian dollar CAD=D4 was trading 0.2 percent lower at 1.3382 to the greenback, or 74.73 U.S. cents.

The currency traded in a range of 1.3346 to 1.3402. It was down 0.4 percent for the week.

"It has been a risk-off day for sure and that ties into the weaker-than-expected Chinese data that we had overnight," said Bipan Rai, North America head of FX strategy at CIBC Capital Markets.

Weak data from China and Europe stoked fears of a global economic slowdown, pressuring stocks and the price of oil, one of Canada's major exports. crude oil futures CLc1 settled 2.6 percent lower$51.20 a barrel, while the U.S. dollar .DXY climbed to a 19-month high against a basket of currencies. U.S. retail sales in November helped boost the greenback, ahead of an interest rate decision next week by the Fed. Money markets see a greater-than 70 percent chance of a rate hike. FEDWATCH

The Fed decision will help determine the direction of the Canadian dollar next week but the currency will also take its cue from domestic inflation and gross domestic product data, Rai said.

Canadian inflation data for November is due next Wednesday and the October GDP report is due next Friday.

On Friday, data from Statistics Canada showed that the ratio of household debt-to-income widened to 173.8 percent in the third quarter, to hold near a record high, from an upwardly revised 173.2 percent in the second quarter. have cut their bearish bets on the Canadian dollar for the first time in five weeks, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed. As of Dec. 11, net short positions had dipped to 11,669 contracts from 12,936 a week earlier.

Canadian government bond prices were higher across the yield curve, with the two-year CA2YT=RR up 8.5 Canadian cents to yield 2.021 percent and the 10-year CA10YT=RR rising 49 Canadian cents to yield 2.101 percent.

The gap between Canada's 10-year yield and its U.S. equivalent widened by 4.2 basis points to a spread of 79.4 basis points in favor of the U.S. bond.

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.