C$ reverses from 10-day high on US-China trade uncertainty
(Adds strategist quotes and details throughout; updates prices)
* Canadian dollar falls 0.2 percent against the greenback
* Canadian household debt-to-income ratio reaches record
* Price of U.S. oil gains 0.6 percent
* Canada's 10-year bond rises 7 Canadian cents
By Fergal Smith
TORONTO, March 14 (Reuters) - The Canadian dollar fell
against its U.S. counterpart on Thursday after hitting an
earlier 10-day high, pressured by weak Chinese data and worries
about the uncertain outcome of U.S.-China trade talks.
Growth in China's industrial output fell to a 17-year low in
the first two months of the year and the jobless rate rose,
reflecting further weakness in the world's second-biggest
"The (U.S.) dollar had been firmer overnight on the
weaker-than-expected Chinese data. That's really been dragging
other developed market currencies lower," said Bipan Rai, North
America head of FX Strategy at CIBC Capital Markets.
U.S. President Donald Trump and Treasury Secretary Steven
Mnuchin said discussions with China to end a months-long trade
war were progressing quickly, though Trump could not say whether
a final deal would be reached.
"If things do go sour in regards to China-U.S. negotiations,
commodity currencies like the loonie will be hit," Rai said.
The trade talks and global economic growth also weighed on
the price of oil, one of Canada's major exports. Still, U.S.
crude oil futures settled 0.6 percent higher at $58.61 a barrel.
At 3:44 p.m. (1944 GMT), the Canadian dollar was
trading 0.2 percent lower at 1.3323 to the greenback, or 75.06
U.S. cents. The currency touched its strongest intraday level
since March 4 at 1.3287.
The loonie fell as Statistics Canada data showed the ratio
of Canadian household debt to income widened to a record 174.0
percent in the fourth quarter.
New home prices in Canada edged down 0.1 percent in January,
following five unchanged months in a row, separate data showed.
Bank of Canada Senior Deputy Governor Carolyn Wilkins is due
to speak later Thursday. The central bank will release her
prepared remarks at 6:50 p.m. EDT (2250 GMT).
Last week, the central bank said it expected the Canadian
economy to be weaker in the first half of 2019 than it projected
Still, the Bank of Canada is unlikely to cut interest rates
to support a flagging economy as long as job growth remains
robust, an analysis of the central bank's response to past
divergences in economic data suggests.
Canadian government bond prices rose across much of the
yield curve, with the 10-year up 7 Canadian cents to
yield 1.758 percent.
(Reporting by Fergal Smith; Editing by Jeffrey Benkoe and
First Published: 2019-03-14 15:55:19
Updated 2019-03-14 22:30:50
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