CANADA’S FX DEBT – Canadian dollar retreats as greenback gains ground

 (Adds strategist quotes and details throughout; updates prices)
    * Canadian dollar weakens 0.3% against the greenback
    * Canada posts a trade surplus of C$594 million in April
    * Price of U.S. oil settles 1.2% higher
    * Canadian 10-year yield hits its lowest in nearly two
months

    By Fergal Smith
    TORONTO, June 8 (Reuters) - The Canadian dollar fell against
its broadly stronger U.S. counterpart on Tuesday, but stayed
within its recent trading range as data showed a surprise
Canadian trade surplus and investors awaited a Bank of Canada
interest rate decision.
    The Canadian dollar        was trading 0.3% lower at 1.2115
to the greenback, or 82.54 U.S. cents, having pulled back from a
six-year high last week at 1.2007. It's weakest level since
mid-May was 1.2144.
    "The CAD is generally trading in tandem with its G10 peers
today, in what appears to be an environment of modest,
broad-based USD strength," said Eric Theoret, global macro
strategist at Manulife Investment Management.
    "The currency has been range bound for over a month now,
trading within a remarkably narrow range following its solid run
into the start of May," Theoret added.
    The loonie has been supported in recent months by higher
commodity prices and a more hawkish stance from the Bank of
Canada.
    The central bank is widely expected to leave its key
interest rate on hold at 0.25% on Wednesday and through the rest
of 2021. But it could cut the pace of its bond purchases once
gain as soon as next quarter, a Reuters poll showed.
                
    Canada posted a trade surplus of C$594 million in April, as
imports fell at a much faster rate than exports, Statistics
Canada said. Analysts had predicted a deficit of C$700 million.
            
    The U.S. dollar        rose against a basket of major
currencies, while the price of oil       , one of Canada's major
exports, settled 1.2% higher at $70.05 a barrel.
                        
    Canadian government bond yields were lower across a flatter
curve, tracking the move in U.S. Treasuries. The 10-year
            fell to its lowest level since April 15 at 1.439%
before recovering to 1.449%, down 2.9 basis points on the day.

 (Reporting by Fergal Smith
Editing by Bernadette Baum and Alistair Bell)
  

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About Natalee Broderick

Natalee Broderick

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