CANADA-$CAD FX DEBT Resists Ukraine Risk as Rate Hike Bets Remain Intact
(Adds quotes and strategist details throughout, updates pricing)
* The Canadian dollar weakens 0.1% against the greenback
* The loonie is trading in a range of 1.2681 to 1.2734
* US oil price drops 2.4%
* Canadian bond yields fall across the curve
By Fergal Smith
TORONTO, Feb 17 (Reuters) – The Canadian dollar was little changed against its U.S. counterpart on Thursday, despite Wall Street falling amid geopolitical concerns as investors stuck to bets that the Bank of Canada would raise interest rates. interest several times in 2022.
“The relationship between FX theft (volatility) and stock and bond market theft just isn’t what it used to be,” said Mazen Issa, senior FX strategist at TD Securities.
“Have we really seen the market suppress central bank pricing because of what’s happening in Ukraine? Not really.”
Money markets expect the BoC to rise on March 2 for the first time since October 2018 and six times in total this year.
US stocks fell as investors turned to defensive sectors and safe havens such as bonds and gold as geopolitical tensions escalated between Washington and Russia over Ukraine.
The price of oil, one of Canada’s top exports, fell 2% to $91.76 a barrel as talks to resuscitate a nuclear deal with Iran reach their final stages, which could unblock more crude.
National data showed that foreign investors bought a net C$37.56 billion in Canadian securities in December, mostly driven by new stocks resulting from cross-border mergers and acquisitions.
Yields on Canadian government bonds fell on a flatter curve, following the performance of US Treasuries.
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