Economy

Canadian Dollar drops, bond yields climb as Ottawa adds to deficit spending

Published

4 years ago

April 20, 2021

By Fergal Smith

TORONTO (Reuters) -The Canadian dollar weakened on Monday against its U.S. counterpart, pulling back from an earlier one-month high, and bond yields rose as Canada‘s government lined up billions in new spending and said it would issue more long-term debt.

The loonie weakened 0.2% to 1.2532 to the greenback, or 79.80 U.S. cents, having touched its strongest intraday level since March 19 at 1.2471.

Canada‘s budget deficit is forecast to hit C$154.7 billion in the fiscal year ending next March, as Ottawa spends heavily to counter a third wave of COVID-19 infections and plans to bolster the economic recovery, the finance department said.

The share of bond issuance with a maturity of 10 years or greater is set to rise to 42% in the fiscal year ending next March from 29% the prior year. It was 15% before the crisis.

Investors were also looking ahead to a Bank of Canada interest rate decision on Wednesday. Analysts expect the central bank to announce it is cutting bond purchases from the current pace of C$4 billion per week.

The price of oil, one of Canada‘s major exports, was supported by a weaker U.S. dollar but gains were capped by concerns about the impact on demand from rising coronavirus cases in India. U.S. crude prices settled 0.4% higher at $63.38 a barrel.

Canadian government bond yields were higher across a steeper curve. The 30-year touched its highest since March 19 at 2.071% before dipping to 2.062%, up 7.7 basis points on the day.

(Reporting by Fergal SmithEditing by Chizu Nomiyama and Grant McCool)

Economy

September merchandise trade deficit narrows to $1.3 billion: Statistics Canada

Published

8 hours ago

November 5, 2024

Anne Joseph

OTTAWA – Statistics Canada says the country’s merchandise trade deficit narrowed to $1.3 billion in September as imports fell more than exports.

The result compared with a revised deficit of $1.5 billion for August. The initial estimate for August released last month had shown a deficit of $1.1 billion.

Statistics Canada says the results for September came as total exports edged down 0.1 per cent to $63.9 billion.

Exports of metal and non-metallic mineral products fell 5.4 per cent as exports of unwrought gold, silver, and platinum group metals, and their alloys, decreased 15.4 per cent. Exports of energy products dropped 2.6 per cent as lower prices weighed on crude oil exports.

Meanwhile, imports for September fell 0.4 per cent to $65.1 billion as imports of metal and non-metallic mineral products dropped 12.7 per cent.

In volume terms, total exports rose 1.4 per cent in September while total imports were essentially unchanged in September.

This report by The Canadian Press was first published Nov. 5, 2024.

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