January 29, 2019 / 9:10 PM / 4 months ago

CANADA FX DEBT-C$ dips as investors turn attention to Fed rate decision

 (Adds strategist quotes and details on activity; updates
prices)
    * Canadian dollar weakens 0.1 percent against the greenback
    * Price of U.S. oil rises 2.5 percent
    * Canadian bond prices rise across the yield curve

    By Fergal Smith
    TORONTO, Jan 29 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Tuesday despite higher oil
prices, as investors kept their powder dry ahead of a Federal
Reserve U.S. rate decision and Canada's monthly gross domestic
product data this week.
    At 3:53 p.m. (2053 GMT), the Canadian dollar          was
trading 0.1 percent lower at 1.3281 to the greenback, or 75.30
U.S. cents. The currency, which on Monday touched its strongest
intraday in more than two weeks at 1.3204, traded in a range of
1.3242 to 1.3285.
    "It's a lot noise and moves today are not really indicative
of anything else," said  Mazen Issa, senior FX strategist at TD
Securities. "It's been a bit of a chop-fest, it's the day before
the Fed."
    The Fed is expected on Wednesday to leave its key overnight
lending rate in a range of 2.25 percent to 2.50 percent and to
acknowledge growing risks to the U.S. economy as global momentum
weakens.             
   Slower global growth could also hurt Canada's economy and
perhaps more so, because Canada is a major commodities producer.
    Analysts expect Canadian GDP data for November, due on
Thursday, to reveal a contraction in the economy.
    The price of oil, one of Canada's major exports, rallied
after the United States imposed sanctions on state-owned
Venezuelan oil company PDVSA, a move likely to reduce the OPEC
member's crude exports and relieve some global oversupply
worries.             
    U.S. crude oil futures        settled 2.5 percent higher at
$53.31 a barrel. Still, some in the oil industry worry that
crude demand could stutter if the trade war between Washington
and Beijing slows global economic growth.
    Chinese telecommunications giant Huawei Technologies Co Ltd
         Chief Financial Officer Meng Wanzhou appeared in a
Canadian court on Tuesday for a hearing concerning her bail in a
case that has strained Beijing's ties with Canada and the United
States.             
    Canadian government bond prices were higher across the yield
curve in sympathy with U.S. Treasuries after data showing U.S.
consumer confidence at its lowest since July 2017.
    The two-year            rose 4 Canadian cents to yield 1.854
percent and the 10-year             climbed 20 Canadian cents to
yield 1.940 percent.

 (Reporting by Fergal Smith
Editing by Frances Kerry and David Gregorio)
  
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