CANADA FX DEBT-Canadian dollar loses weekly winning streak as market mood sours

Canadian dollar rises 0.2% against the greenback
  
    * Loonie falls 1.3% for the week
  
    * Canadian industrial capacity use falls in the first
  
quarter
  
    * Canadian bond yields were mixed across the curve
  

  
    By Fergal Smith
  
    TORONTO, June 12 (Reuters) - The Canadian dollar
  
strengthened against its U.S. counterpart on Friday along with a
  
rebound in Wall Street stocks, but a sharp decline a day earlier
  
left the loonie with a weekly loss, ending a three-week winning
  
streak.
  
    The Canadian dollar        was trading 0.2% higher on the
  
day at 1.3595 to the greenback, or 73.56 U.S. cents. The
  
currency traded in a range of 1.3527 to 1.3666.
  
    The loonie was down 1.3% for the week, after climbing for
  
each of the previous three weeks. On Wednesday, it reached its
  
strongest level in more than three months at 1.3311.
  
    "The souring mood in markets has lifted the USD from its
  
COVID-depths and may keep the dollar's key peers on the
  
defensive in the short-run, particularly high-beta FX such as
  
the CAD, AUD, and MXN," strategists at Scotiabank, including
  
Shaun Osborne, said in a note.
  
    Beta is a measure of a financial asset's volatility compared
  
to the market. Canada is a major exporter of commodities,
  
including oil, so the loonie tends to be sensitive to the
  
outlook for the global economy.
  
    U.S. stocks rallied a day after their biggest daily dive in
  
about three months, while U.S. crude oil futures settled 0.2%
  
lower at $36.26 a barrel.                             
  
    Canadian industries ran at 79.8% of capacity in the first
  
quarter of 2020, down from an upwardly revised 81.4% in the
  
fourth quarter, Statistics Canada said.             
  
    Separate data from Canada's national statistics agency
  
showed that producer prices, in a flash estimate, gained 1.2% in
  
May from April, led by strong gains in meat prices as COVID-19
  
closed down packing plants.             
  
    Canadian government bond yields were mixed across the curve,
  
with the 10-year             up less than a basis point at
  
0.529%. Still, the 10-year yield has tumbled nearly 24 basis
  
from last Friday's peak.
  

  
 (Reporting by Fergal Smith; 
  
editing by Jonathan Oatis and David
  
Gregorio)
  
Source : Reuters

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