CANADA’S FX DEBT – Canadian dollar recovers from one-week low as exports climb

 (Adds analyst quotes and details throughout, updates prices)
    * Canadian dollar rises 0.2% against the greenback
    * Earlier touched weakest level since Dec. 29 at 1.2813
    * Canada posts trade surplus of C$3.1 billion in November
    * Canada's 10-year yield touches its highest since Nov. 26

    By Fergal Smith
    TORONTO, Jan 6 (Reuters) - The Canadian dollar strengthened
against its U.S. counterpart on Thursday as the sell-off in
stocks on the prospect of faster U.S. interest rate hikes
subsided and data showed Canadian exports climbing to a record
    The Canadian currency        was trading 0.2% higher at
1.2723 to the greenback, or 78.60 U.S. cents, after earlier
hitting its weakest level since Dec. 29 at 1.2813.
    "The loonie has largely tracked the progress of the recovery
in the S&P 500 index in today's trading session," said Simon
Harvey, Head of FX analysis for Monex Europe and Monex Canada.
    U.S. stock markets, including the benchmark S&P 500, edged
higher after they were slammed on Wednesday by Federal Reserve
minutes that struck a hawkish note.             
    Canada posted a trade surplus of C$3.1 billion in November,
the largest since September 2008, helped by a 3.8% increase in
    "Continued strength in manufacturing sentiment south of the
border, alongside robust commodity prices and demand, bode well
for exports," Omar Abdelrahman, an economist at TD Economics,
said in a note.
    The price of oil, one of Canada's major exports, was
supported by escalating unrest in OPEC+ oil producer Kazakhstan
and supply outages in Libya. U.S. crude        settled 2.1%
higher at $79.46 a barrel.             
    Canada's employment report for December, due on Friday,
could offer further clues about the strength of its economy.
    Since December, some Canadian provinces have announced
restrictions to help contain the spread of the Omicron
coronavirus variant.                     
    Canadian government bond yields were higher across the
curve, tracking the move in U.S. Treasuries. The 10-year
            touched its highest level since Nov. 26 at 1.718%
before dipping to 1.706%, up 6.1 basis points on the day.

 (Reporting by Fergal Smith; Editing by Jonathan Oatis and
Alexander Smith)

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