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CANADA FX DEBT-C$ recovers to trade flat after hitting 1-week low
September 14, 2017 / 9:09 PM / 7 days ago

CANADA FX DEBT-C$ recovers to trade flat after hitting 1-week low

 (Adds analyst comment, details; updates prices)
    * Canadian dollar at C$1.2185, or 82.07 U.S. cents
    * Loonie earlier touched weakest since Sept. 7 at C$1.2240
    * Bond prices mixed across flatter yield curve
    * 10-year yield hits highest intraday since October 2014

    By Alastair Sharp
    TORONTO, Sept 14 (Reuters) - The Canadian dollar traded
little changed against its U.S. counterpart after paring earlier
losses on Thursday, helped by oil price gains as investors
sought clues on the relative likelihood of tighter monetary
policy.
    "The market is trying to get a sense of whether the Bank of
Canada is hiking alone or if it will be joined by other central
banks, specifically the Bank of England and the Federal
Reserve," said Adam Button, a currency analyst at ForexLive in
Montreal.
    At 4 p.m. ET (2000 GMT), the Canadian dollar          was
trading at C$1.2185 to the greenback, or 82.07 U.S. cents, down
0.1 percent.
    The loonie has rallied 13 percent against the greenback
since early May, boosted by a rapid expansion in the Canadian
economy that prompted the Bank of Canada to raise interest rates
in July, its first hike in nearly seven years, and again last
week.
    The central bank's policy rate sits at 1 percent.
    The currency's strongest level of the session was C$1.2157,
while it touched its weakest since Sept. 7 at C$1.2240 after
firmer U.S. inflation data briefly boosted the greenback.
               
    Oil prices rose, with Brent closing at a five-month high,
after a string of reports forecast the market would tighten
further as fuel demand increased.      
    U.S. West Texas Intermediate crude        broke above $50 a
barrel and settled 1.2 percent higher at $49.89, its highest
close since July 31.
    Oil is one of Canada's major exports.
    "There is some major push and pull in the Canadian dollar at
the moment," Forexlive's Button said.
    The earlier slip in the Canadian dollar came as a flurry of
disappointing data from China suggested the world's
second-largest economy is finally starting to lose some momentum
as borrowing costs rise.             
    China is a major buyer of commodities produced by countries
such as Canada.    
    Canadian new home prices rose 0.4 percent in July from June,
slightly exceeding economists' forecasts for a gain of 0.3
percent. Vancouver had strong demand from buyers, while prices
in Toronto were unchanged for a second straight month following
provincial measures to rein in the market, data from Statistics
Canada showed.             
    Canadian government bond prices were mixed across a flatter
yield curve, with the two-year            down 2 Canadian cents
to yield 1.578 percent and the 10-year             adding 9
Canadian cents to yield 2.058 percent.
    The 10-year yield touched its highest intraday since October
2014 at 2.105 percent before pulling back.

 (Reporting by Fergal Smith; Editing by Meredith Mazzilli and
Leslie Adler)
  
 

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