CANADA FX DEBT-C$ climbs to 2-1/2-month high as EU recovery plan cheers investors

    * Canadian dollar rises 0.1% against the greenback
    * Loonie touches its strongest since March 12 at 1.3727
    * Price of U.S. oil decreases 1.5%
    * Canadian bond yields rise across the curve

    TORONTO, May 27 (Reuters) - The Canadian dollar strengthened
against the greenback on Wednesday to its highest in about
two-and-a-half months, as reports of a European Union rescue
fund supported investor sentiment, helping to offset a pullback
in oil prices.
    World shares          surged as the European Commission
proposed a package worth in total 1.85 trillion euros for the
EU's next long-term budget and a recovery fund for economies
hammered by the coronavirus pandemic.             
    The price of oil, one of Canada's major exports, fell after
U.S. President Donald Trump said he was working on a strong
response to China's proposed security law in Hong Kong. U.S.
crude oil futures        fell 1.5% to $33.82 a barrel after
trading on Tuesday at their highest in more than two months.
    The Canadian dollar        was up 0.1% at 1.3759 to the
greenback, or 72.68 U.S. cents. The currency touched its
strongest intraday level since March 12 at 1.3727.
    The value of Canadian building permits dropped by 17.1% in
April from March, Statistics Canada said. Non-essential business
was halted across Canada in April to help contain the spread of
the novel coronavirus.             
    Canada's first-quarter GDP report is due on Friday, which
can help guide expectations for next week's Bank of Canada
interest rate decision.
    On Tuesday, Bank of Canada Governor Stephen Poloz, making
his last public appearance as governor before he retires next
week, said the central bank can deliver more monetary stimulus
if needed to meet its 2% inflation target as the economy
recovers from the pandemic.             
    Canadian government bond yields were higher across the curve
on Wednesday, with the 10-year             up 1.1 basis points
at 0.562%. 

 (Reporting by Fergal Smith; Editing by Steve Orlofsky)