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CANADA FX DEBT-Canadian dollar notches 1-month high ahead of federal budget

    * Canadian dollar edges 0.1% higher against the greenback
    * Loonie touches its strongest level since March 19 at
1.2471
    * Price of U.S. oil falls 0.3%
    * Canadian bond yields were mixed across the curve

    By Fergal Smith
    TORONTO, April 19 (Reuters) - The Canadian dollar
strengthened to a one-month high against its U.S. counterpart on
Monday, as the greenback broadly declined and ahead of a federal
budget that is expected to spend big amid a fast-rising third
wave of COVID-19 infections.    
    Canada will present a budget on Monday, at about 4 p.m.
(2000 GMT), with billions of dollars for pandemic recovery
measures, C$2 billion toward national childcare, and new taxes
on luxury goods.             
    "This is going to be a serious budget that either sets the
stage for post-pandemic policy in Canada, or has all the makings
of an election platform, possibly to be used as soon as later
this year," said Robert Kavcic, senior economist at BMO Capital
Markets.
    Wednesday's Bank of Canada interest rate decision will also
be a focus for investors, with strategists expecting the central
bank to announce it is cutting bond purchases from the current
pace of C$4 billion per week.             
    The Canadian dollar        was trading 0.1% higher at 1.2492
to the greenback, or 80.05 U.S. cents, having touched its
strongest intraday level since March 19 at 1.2471.
    The price of oil, one of Canada's major exports, eased amid
concerns that rising coronavirus infections in India and other
countries would dent fuel demand. U.S. crude        prices were
down 0.3% at $62.97 a barrel.             
    The U.S. dollar        fell to its lowest in nearly seven
weeks against a basket of major currencies as the Federal
Reserve's view that any spike in inflation was likely to be
temporary weighed on Treasury yields.                 
    Canadian government bond yields were mixed across the curve,
with the 10-year             down less than half a basis point
at 1.537%.

 (Reporting by Fergal Smith
Editing by Chizu Nomiyama)
  
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