C$ extends holding pattern as stocks weather UK political risk

* Canadian dollar trades near flat against the greenback
* Price of U.S. oil falls nearly 1 percent
* Canadian bond prices decline across the yield curve
* 2-year yield touches a 4-week high at 1.975 percent.

TORONTO, Jan 16 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Wednesday, extending
this week's sideways pattern as stocks took British political
upheaval in stride and oil prices reduced some of the previous
day's gains.
World equity markets held their nerve after the heavy
parliamentary defeat of British Prime Minister Theresa May's
Brexit deal as investors saw potential for legislative deadlock
forcing London to delay its departure from the European Union.

The price of oil, one of Canada's major exports, was
pressured by worries about the global economy and forecasts of
swelling U.S. production. U.S. crude oil futures were
down nearly 1 percent at $51.61 a barrel,
At 8:52 a.m. (1352 GMT), the Canadian dollar was
trading nearly unchanged at 1.3260 to the greenback, or 75.41
U.S. cents. The currency, which on Monday touched its weakest
level in nearly one week at 1.3297, traded in a range of 1.3245
to 1.3293.
For the week, the loonie was also nearly unchanged after
rallying 2.9 percent since the start of the year.
Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries. The two-year
fell 4 Canadian cents to yield 1.915 percent and the 10-year
declined 13 Canadian cents to yield 1.986 percent.
The two-year yield touched its highest intraday since Dec.
17 at 1.975 percent.
Canada's inflation report for December is due on Friday,
which can help guide expectations for future interest rate hikes
from the Bank of Canada.

(Reporting by Fergal Smith; editing by Jonathan Oatis)


2019-01-16 16:17:54

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