(Adds economist quote and details throughout; updates prices) * Canadian dollar gains 0.1% against the greenback
(Adds economist quote and details throughout; updates prices)
*
Canadian dollar gains 0.1% against the greenback
*
Factory sales rise by 2.8% in October from September
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Price of U.S. oil settles 2.5% higher
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Canadian bond yields ease across curve
TORONTO, Dec 14 (Reuters) – The Canadian dollar moved
slightly higher against its U.S. counterpart on Wednesday as oil
prices rose and investors grappled with more hawkish than
expected projections by the Federal Reserve.
The loonie was up 0.1% at 1.3530 to the greenback, or
73.91 U.S. cents, in volatile trading as equity markets swung in
and out of negative territory after a Fed rate decision.
The U.S. central bank raised interest rates by half a
percentage point, as expected, and projected that the policy
rate would rise to 5.1% in 2023, slightly higher than investors
expected.
“The Fed has downshifted the pace of tightening, but theyre
not done yet,” Robert Kavcic, a senior economist at BMO Capital
Markets, said in a note.
“In addition to how much further they have to go, the major
question is how long rates will have to stay at peak levels to
ensure inflation pressure is sufficiently quashed.”
On Tuesday, the loonie touched its strongest level since
Dec. 5 at 1.3519 as U.S. data showed an easing of inflation
pressures.
The price of oil, one of Canada’s major exports, settled
2.5% higher on Wednesday at $77.28 a barrel after OPEC
and the International Energy Agency (IEA) both forecast a
rebound in demand over the course of next year.
Canadian factory sales rose by 2.8% in October from
September on higher sales of petroleum and coal products, as
well as food, but the entire increase was driven by higher
prices, data from Statistics Canada showed.
Canadian government bond yields were lower across the curve,
with the 10-year down 2.3 basis points at 2.822%.
(Reporting by Fergal Smith; editing by Jonathan Oatis)
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