April 10, 2017 / 8:41 PM / 8 months ago

CANADA FX DEBT-C$ notches one-week high as oil rallies

    * Canadian dollar ends at C$1.3332, or 75.01 U.S. cents
    * Bond prices mixed across yield curve

    TORONTO, April 10 (Reuters) - The Canadian dollar firmed on
Monday to a one-week high against its U.S. counterpart as oil
prices rose, while the strength of recent domestic data added to
support for the loonie ahead of this week's Bank of Canada
decision on interest rates.
    U.S. crude        prices settled up 84 cents at $53.08 a
barrel, supported by a renewed shutdown at Libya's largest
oilfield and heightened tension over Syria following the U.S.
missile strike.      
    Oil is one of Canada's major exports.            
    "There is some followthrough from the robust jobs number
last week," said Bipan Rai, senior macro strategist at CIBC
Capital Markets.
    Data on Friday showed that Canada added a
greater-than-expected 19,400 jobs in March, adding to recent
evidence that the economy has finally turned the corner.
            
    It is going to be difficult for the central bank to drive
home a dovish message given that "the data has been so robust,"
Rai added.
    The Bank of Canada will release its interest rate decision
and Monetary Policy Report on Wednesday.
    The Canadian dollar          ended at C$1.3332 to the
greenback, or 75.01 U.S. cents, stronger than Friday's close of
C$1.3410, or 74.57 U.S. cents.
    The currency's weakest level of the session was C$1.3425,
while it touched its strongest since April 3 at C$1.3328.
    Gains for the loonie came as data showed that Canadian
housing starts jumped in March to their highest level in more
than nine years. The seasonally adjusted annual rate of housing
starts rose to 253,720 units, topping economists' forecasts for
215,000.             
    Still, speculators have increased bearish bets on the
Canadian dollar to the most since March 2016, data from the
Commodity Futures Trading Commission and Reuters calculations
showed on Friday. Canadian dollar net short positions increased
to 30,225 contracts as of April 4 from 28,217 a week earlier.
    Canadian government bond prices were mixed across the yield
curve, with the two-year            flat to yield 0.762 percent
and the 10-year             falling 4 Canadian cents to yield
1.602 percent.
    On Friday, the 10-year yield touched a more than four-month
low at 1.505 percent.

 (Reporting by Fergal Smith, editing by G Crosse)
  
 

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