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Bonds News

CANADA FX DEBT-Canadian dollar edges lower as oil rally stalls

    * Canadian dollar dips 0.1% against the greenback
    * Loonie trades in a range of 1.2703 to 1.2746
    * Price of U.S. oil falls 0.3%
    * Canadian bond yields ease across the curve

    TORONTO, Jan 13 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Wednesday as oil, one of
Canada's major exports, pulled back from an earlier 11-month
high and the greenback broadly climbed.
    U.S. crude        prices were down 0.3% at $53.04 a barrel
as rising global COVID-19 cases took the shine off an earlier
rally spurred by a bigger-than-expected drop in U.S. crude
inventories.             
    The U.S. dollar        rose against a basket of major
currencies as data showed U.S. consumer prices increased solidly
in December amid a surge in the cost of gasoline.             
    In Canada, producer prices rose 1.4% in December from
November, following two months of decline, thanks to higher
prices for lumber and energy products, Statistics Canada said in
a flash estimate.             
    The Canadian dollar        was trading 0.1% lower at 1.2725
to the greenback, or 78.59 U.S. cents, having traded in a range
of 1.2703 to 1.2746.       
     Money markets see an increased chance of the Bank of Canada
cutting interest rates closer to zero, as tightening economic
restrictions to contain a second wave of COVID-19 cases offset
optimism that activity will rebound later this year.
            
    On Tuesday, Ontario declared an emergency after latest
modeling put Canada's most populous province on track to have
more than 20,000 new COVID-19 cases per day by the middle of
February.                      
    Canadian government bond yields eased across the curve on
Wednesday as U.S. Treasury yields fell. The 10-year            
dipped 1 basis point to 0.831%, having touched on Tuesday its
highest in nearly 10 months at 0.887%.

 (Reporting by Fergal Smith; Editing by Andrea Ricci)
  
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