November 26, 2018 / 9:09 PM / 19 days ago

CANADA FX DEBT-C$ near flat as GM plant closure offsets oil price rally

 (Adds strategist quote, details throughout; updates prices)
    * Price of U.S. oil rallies 2.4 percent
    * Canadian bond prices trade lower across the yield curve

    By Fergal Smith
    TORONTO, Nov 26 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Monday, as a rebound in
oil prices was offset by news that General Motors Co       
would close its plant in Oshawa, Ontario, east of Toronto.
    Hundreds of workers walked off the job and Canadian Prime
Minister Justin Trudeau expressed "deep disappointment" after
the auto manufacturer's announcement caught governments and
employees by surprise.             
    The closure of the plant reminded markets "that Canada does
have a little bit of a competitiveness issue," said Greg
Anderson, global head of foreign exchange strategy in New York
at BMO Capital Markets.
    Last week, Canada's government said it would allow
businesses to write off additional capital investments to make
them more competitive at a time when the United States is
aggressively cutting taxes. [            ]
    Still, Ottawa did not announce measures that would help the
country's energy sector, which has been hit hard by depressed
oil prices.
    The price of oil clawed back on Monday some of the previous
session's steep losses. U.S. crude oil futures        settled
2.4 percent higher at $51.63 a barrel, while Wall Street
rebounded as buyers returned in force after last week's
sell-off.             
    At 3:38 p.m. (2038 GMT), the Canadian dollar          was
trading nearly unchanged at 1.3242 to the greenback, or 75.52
U.S. cents. The currency, which last Tuesday touched its weakest
level in nearly five months at 1.3318, traded in a range of
1.3188 to 1.3248.
    Speculators have added to their bearish bets on the Canadian
dollar, data from the U.S. Commodity Futures Trading Commission
and Reuters calculations showed. As of Nov. 20, net short
positions had increased to 6,289 contracts from 2,791 a week
earlier.
    Data on Friday showed that Canada's annual inflation rate
remained above the central bank's target for the ninth straight
month in October, but markets saw few signs the Bank of Canada
would hike interest rates next month.             
    Canada's gross domestic product data for the third quarter
is due on Friday.
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries. The two-year           
fell 2.5 Canadian cents to yield 2.245 percent and the 10-year
            declined 15 Canadian cents to yield 2.358 percent.
    On Friday, the 10-year yield touched its lowest in more than
two months at 2.330 percent.   

 (Reporting by Fergal Smith; Editing by Grant McCool and Peter
Cooney)
  
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