The Canadian dollar weakened against its U.S. counterpart on Wednesday as bond yields hit new lows and data showed improvement in Canada’s trade deficit that was less than expected.
Canada’s trade deficit narrowed in January to $4.25-billion, as exports grew at a faster rate than imports, Statistics Canada said. Analysts had forecast a deficit of $3.50-billion. Canada’s 10-year yield fell 3 basis points further below the yield on the 3-month T-bill to –11.4 basis points. An inverted curve is seen by some investors as a leading indicator of recession.At 8:57 a.m. , the Canadian dollar was trading 0.3 per cent lower at 1.3420 to the greenback, or 74.52 U.S. cents. The currency, which touched on Monday a two-week low at 1.3445, traded in a range of 1.3377 to 1.3429.
Separate data from Statistics Canada showed that non-farm payroll employees rose by 71,200 in January from December. A previously released monthly survey from Statistics Canada, the Labour Force Survey, has also showed strong job gains at the start of the year.The price of oil, one of Canada’s major exports, see-sawed as further disruptions to Venezuela’s crude exports were offset by a report that U.S. inventories rose last week. U.S. crude prices were up 0.1 per cent at $60.02 a barrel.
Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries. The two-year rose 6 Canadian cents to yield 1.475 per cent and the 10-year was up 26 Canadian cents to yield 1.546 per cent.
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