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CANADA FX DEBT-Canadian dollar underperforms most G10 currencies as oil falls

By Reuters News

By Fergal Smith

TORONTO, Nov 9 (Reuters) - The Canadian dollar steadied against its US counterpart on Monday, while underperforming most other Group of 10 currencies, as oil prices fell and after recent domestic jobs data kept expectations for Bank of Canada interest rate hikes in check.

The loonie was barely changed at 1.4135 per US dollar, or 70.75 US cents, holding near an 18-day low it touched on Friday at 1.4137.

  • Among G10 currencies, only the loonie and the Swiss franc did not post gains against the greenback as easing concerns about an escalation in the Middle East conflict prompted investors to rotate back into risk assets following last week's selloff in artificial intelligence-linked stocks.

  • Data on Friday showed that Canadian employment fell for a third straight month in October and the jobless rate rose to a six-month high of 6.7%. Separate data showed accelerating US job growth.

  • "Diverging employment data releases will likely keep USD-CAD supported above 1.40," strategists at TD Securities, including Jayati Bharadwaj, said in a note.

  • "(The) rising unemployment rate amid falling wage growth rate in Canada also reduces the market pricing of a December BoC rate hike relative to the Fed," the strategists said.

  • Investors see a roughly 40% chance the BoC will raise interest rates in December. Chances that the Fed would tighten next month are seen at 84%.

  • Minutes from the Canadian central bank's October policy meeting, when it hiked for the first time in three years, are due for release on Tuesday.

  • The price of oil, one of Canada's major exports, fell after US President Donald Trump downplayed the likelihood of renewed strikes on Iran. US crude oil futures were trading 3.5% lower at $87.64 a barrel.

  • Canadian government bond yields were mixed across the curve. The 10-year was down about half a basis point at 3.653%, after touching a nearly three-month low at 3.608% during Friday's session.

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