Saturday, March 25

Canadian dollar falls as trade balance shifts into deficit

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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


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)