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TORONTO — The Canadian dollar weakened
against its US counterpart on Tuesday, giving back some of the
previous day’s sharp gains, as oil prices fell and data showed a
surprise trade deficit.
Canada posted a trade deficit of C$137 million in December,
as imports rose and exports fell from November, Statistics
Canada said. Analysts had forecast a surplus of C$2.50 billion.
The price of oil, one of Canada’s major exports, slipped
ahead of the resumption of indirect talks between the United
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States and Iran, which could revive an international nuclear
agreement and allow more oil exports from the OPEC producer.
US crude prices fell 1.3% to $90.12 a barrel, while
the Canadian dollar was trading 0.3% lower at 1.2703 to
the greenback, or 78.72 US cents.
It traded in a range of 1.2665 to 1.2717. On Monday, it
climbed 0.8%, its biggest gain in nearly four weeks.
The US dollar rallied against a basket of major
currencies as European Central Bank President Christine Lagarde
tried to rein in interest rate hike expectations that had lifted
the euro .
Angry Canadian truckers were blocking the busiest crossing
with the United States as Prime Minister Justin Trudeau prepared
to face legislators later in the day to discuss the growing
crisis.
BoC Governor Tiff Macklem is due to speak on Wednesday on
the evolution of Canadian business, which could offer clues on
the outlook for interest rates. Money markets expect the central
bank to hike next month for the first time since October 2018.
Canadian government bond yields were higher across a steeper
curve, tracking the move in US Treasuries.
The 10-year was up 3.8 basis points at 1.876%,
in reach of last month’s peak at 1.905%, which was its highest
in nearly three years.
(Reporting by Fergal Smith; editing by Jason Neely)
financialpost.com