Canadian government bond yields eased across the curve.
The 10-year fell 4.9 basis points to 2.907%,
while the gap between it and its U.S. equivalent narrowed by 2.5
basis points to about 54 basis points in favor of the U.S.
bond.
(Reporting by Fergal Smith
Editing by Marguerita Choy)
(New throughout)
By Fergal Smith
TORONTO, May 10 (Reuters) - The Canadian dollar edged
higher against the greenback on Wednesday, with the currency
giving back much of its earlier gain as worries about the global
economic outlook offset data showing cooler U.S. inflation.
The annual increase in U.S. consumer prices slowed to below
5% in April for the first time in two years, which could help
convince the Federal Reserve to pause its interest rate hiking
campaign.
With inflation easing, investors have become more focused on
prospects for economic growth, said Adam Button, chief currency
analyst at ForexLive.
"The market just can't shake the feeling that a downturn in
the global economy is imminent," Button said.
Canada is a major producer of commodities, so the loonie
tends to be particularly sensitive to the global economic
outlook. The price of oil settled 1.6% lower at &72.56 a barrel.
The Canadian dollar was trading 0.1% higher at
C$1.3380 to the greenback, or 74.74 U.S. cents, after moving in
a range of 1.3336 to 1.3414.
Domestic data showed the value of building permits
rising 11.3% in March.
India and Canada aim to seal an initial agreement this year
to increase their trade and expand investment while setting out
a mechanism to deal with disputes, they said in a statement.
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