CANADA FX DEBT-C$ claws back some of previous day’s decline as oil rallies

* Canadian dollar rises 0.1% against the greenback

* Loonie trades in a range of 1.3116 to 1.3157

* Price of U.S. oil increases 1.6%

* Canadian bond yield ease across a flatter curve

TORONTO, Oct 14 (Reuters) – The Canadian dollar edged higher
against its U.S. counterpart on Wednesday as oil prices rose and
Wall Street steadied, with the loonie clawing back some of the
previous day’s decline ahead of comments by Bank of Canada
Deputy Governor Timothy Lane.

The loonie was trading 0.1% higher at 1.3126 to the
greenback, or 76.18 U.S. cents, having traded in a range of
1.3116 to 1.3157. Tuesday’s decline for the loonie broke a
string of four straight daily gains.

Futures tracking the S&P 500 were slightly higher after
being pressured the previous day by fading hopes of a deal on
federal aid as well as a halt in trials of a COVID-19 vaccine.

Canada runs a current account deficit and is a major
producer of commodities, including oil, so the loonie tends to
be sensitive to the global flow of trade and capital.

U.S. crude prices were up 1.6% at $40.84 a barrel
despite concern that soaring coronavirus cases worldwide would
weigh on fuel demand.

Lane is due to participate in a panel discussion at 10:30
a.m. (1430 GMT) on central bank digital currency. Last week,
Bank of Canada Governor Tiff Macklem said that the central bank
is not actively discussing negative interest rates but they are
a tool it could use in case it needs to do more to tackle
economic challenges caused by the coronavirus outbreak.

Canadian government bond yields were lower across a flatter
curve on Wednesday, with the 10-year down 1.5 basis
points at 0.574%.

(Reporting by Fergal Smith
Editing by Nick Zieminski)
(([email protected]; +1 647 480 7446;))


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