CANADA’S FX DEBT – Canadian dollar sells past gains as Wall Street falters

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 (Adds dealer quotes and details throughout; updates prices)
    * Canadian dollar trades in a range of 1.2322 to 1.2390
    * Canadian retail sales rise 2.1% in August from July 
    * Price of U.S. oil settles 1.5% higher 
    * Canadian 10-year yield eases 4.2 basis points to 1.659%

    By Fergal Smith
    TORONTO, Oct 22 (Reuters) - The Canadian dollar barely moved
against its U.S. counterpart on Friday, giving back some earlier
gains as U.S. equity markets dipped and investors turned
attention to a Bank of Canada interest rate announcement next
week.
    The loonie        was trading nearly unchanged at 1.2368 to
the greenback, or 80.85 U.S. cents, after trading in a range of
1.2322 to 1.2390.
    The currency on Thursday touched its strongest level in
nearly four months at 1.2287 but ended little changed for the
week after some profit-taking.    
    "You have seen the equity market taper off and I think the
Canadian dollar is following along with equities," said Rahim
Madhavji, president at KnightsbridgeFX.com.
    "Heading into the weekend and the Bank of Canada next week,
it's a good time to lock in profits."
    The S&P 500 and Nasdaq closed lower after comments on
stimulus tapering from Federal Reserve Chair Jerome Powell
spooked markets trading at record levels.             
    Canadian retail sales rose 2.1% in August from July even as
global supply shortages held back auto sales. But preliminary
estimates for September were less encouraging, showing retail
sales falling 1.9% and manufacturing sales down 3.2%.
                
    "The flash estimates for September aren't great news for the
final month of the quarter," Royce Mendes, senior economist at
CIBC Capital Markets, said in a note.
    Still, the Bank of Canada is expected to largely end
stimulus from its bond-buying program next Wednesday, while
money markets are anticipating four interest rate hikes next
year.               
    The price of oil, one of Canada's major exports, settled
1.5% higher at $83.76 a barrel as concerns about tight supply
fueled bullish sentiment.                 
    Canadian government bond yields were mixed across a flatter
curve. The 10-year             yield touched its highest level
since January of 2020 at 1.713% before easing to 1.659%, down
4.2 basis points on the day.

 (Reporting by Fergal Smith
Editing by Paul Simao and Sandra Maler)
  


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