US Markets

Canadian dollar firms as global trade optimism rises

Credit: REUTERS/Chris Wattie

The Canadian dollar edged higher against its U.S. counterpart on Tuesday as investors grew more optimistic on trade talks between the United States and China.

* Canadian dollar rises 0.1% against the greenback

* Price of U.S. oil decreases 1.1%

* Canadian bond prices gain across a flatter yield curve

TORONTO, Sept 24 (Reuters) - The Canadian dollar edged higher against its U.S. counterpart on Tuesday as investors grew more optimistic on trade talks between the United States and China.

U.S. stocks rose as Washington confirmed that trade negotiations with China would resume in two weeks, easing some uncertainty caused by the cancellation of a planned U.S. farm visit by Chinese delegates last week.

Canada is a major exporter of commodities, including oil, so its economy could benefit from an improved outlook for global trade.

Oil prices fell as investors bet that Saudi Arabia could restore oil output faster than anticipated following attacks last week. U.S. crude oil futures were down 1.1% at $58.01 a barrel.

At 9:55 a.m. (1355 GMT), the Canadian dollar was trading 0.1% higher at 1.3253 to the greenback, or 75.45 U.S. cents. The currency's weakest level was 1.3266, while it touched its strongest since last Thursday at 1.3247.

The gain for the loonie came after stronger-than-expected wholesale trade data on Monday supported bets that the Bank of Canada would leave interest rates unchanged this year.

Chances of a rate cut by December have fallen to less than 30% from about 90% earlier this month, data from the overnight index swaps market showed.

Canadian government bond prices were higher across a flatter yield curve, with the two-year price 1.5 Canadian cents to yield 1.558% and the 10-year rising 23 Canadian cents to yield 1.351%.

On Monday, the 10-year yield hit its lowest intraday level since Sept. 10 at 1.339%. (Reporting by Fergal Smith, Editing by William Maclean) ((fergal.smith@thomsonreuters.com; +1 416 941 8113;)) Keywords: CANADA FOREX/

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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