CANADA FX DEBT-C$ rallies along with stocks; BoC decision due Wednesday

    * Canadian dollar rises 0.3% against the greenback
    * Canadian producer prices gained 0.4% in June 
    * Price of U.S. oil falls 0.4%
    * Canadian bond yields rise across much of a steeper curve

    TORONTO, July 13 (Reuters) - The Canadian dollar
strengthened against its U.S. counterpart on Monday as stock
markets globally climbed and ahead of an interest rate decision
this week from the Bank of Canada, with the loonie recovering
from a 10-day low on Friday.   
    World shares were approaching a five-month peak as investors
wagered the earnings season would see most companies beat
forecasts given expectations had been lowered by coronavirus
    Canada runs a current account deficit and is a major
exporter of commodities, so the loonie tends to sensitive to the
global flow of trade and capital.
    U.S. crude        prices were down 0.4% at $40.37 a barrel,
pressured by a record daily rise in global coronavirus cases
with big spikes in infections over the weekend in the United
    The Canadian dollar        was trading 0.3% higher at 1.3545
to the greenback, or 73.83 U.S. cents, its strongest level of
the session. On Friday, the loonie hit a 10-day low at 1.3631.
    Speculators have cut their bearish bets on the Canadian
dollar for the third straight week, data from the U.S. Commodity
Futures Trading Commission showed on Friday. As of July 7, net
short positions had decreased to 16,818 contracts from 20,519 in
the prior week.
    The BoC is widely expected to leave its benchmark interest
rate at a record low of 0.25% on Wednesday. Much of the focus
will be on the central bank's outlook for the economy.
    On Friday, data showed that the economy added nearly one
million jobs in June as firms reopened following closures
triggered by COVID-19.                       
    Canadian government bond yields were higher on Monday across
much of a steeper curve, with the 10-year             up 2.6
basis points at 0.575%.
    Producer prices in Canada gained 0.4% in June from May,
primarily on higher prices for energy and petroleum products,
Statistics Canada said in a preliminary flash estimate.

 (Reporting by Fergal Smith
Editing by Nick Zieminski)