February 14, 2017 / 2:44 PM / 10 months ago

CANADA FX DEBT-C$ posts fresh 1-week high as oil prices climb

* Canadian dollar at $1.3042, or 76.68 U.S. cents
    * Loonie touches its strongest since Feb. 6 at C$1.3025
    * Bond prices slightly lower across the yield curve
    * 10-year yield touches its highest since Feb. 3 at 1.751
percent

    TORONTO, Feb 14 (Reuters) - The Canadian dollar strengthened
to set a one-week high against its U.S. counterpart on Tuesday
as oil prices rose and the resignation of U.S. President Donald
Trump's national security adviser pressured the greenback.
    Gains for the Canadian dollar came one day after Trump
downplayed potential changes to trade ties between the United
States and Canada. 
    The U.S. dollar partially recovered from its earlier
decline against a basket of currencies on the resignation of
Michael Flynn as data showed a stronger-than-forecast rise in
U.S. producer prices. Investors were also bracing for testimony
from Federal Reserve chief Janet Yellen that may offer clues to
the timing of the next U.S. interest rate rise.
  
    U.S. crude prices were up 1.28 percent at $53.61 a
barrel, supported by an effort led by the Organization of the
Petroleum Exporting Countries to cut output. 
    Oil is one of Canada's major exports.
    At 9:13 a.m. ET (1413 GMT), the Canadian dollar was
trading at C$1.3042 to the greenback, or 76.68 U.S. cents,
stronger than Monday's close of C$1.3075, or 76.48 U.S. cents.
    The currency's weakest level of the session was C$1.3078,
while it touched its strongest since Feb. 6 at C$1.3025.
    In domestic data, home prices rose 0.5 percent in January
and 13.0 percent from a year earlier as values in the hot
Toronto market climbed even further and those in Vancouver
picked up after three months of declines, the Teranet-National
Bank Composite House Price Index showed. 
    Canadian government bond prices were slightly lower across
the yield curve in sympathy with U.S. Treasuries ahead of
Yellen's testimony. The two-year dipped 0.5 Canadian
cent to yield 0.789 percent, and the 10-year 
declined 7 Canadian cents to yield 1.740 percent.
    The 10-year yield touched its highest intraday since Feb. 3
at 1.751 percent.
    Canadian manufacturing sales data for December is due on
Wednesday. 

 (Reporting by Fergal Smith; Editing by Lisa Von Ahn)

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