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CANADA FX DEBT-C$ stabilizes with oil after hitting near 2-month low
March 3, 2017 / 2:37 PM / 9 months ago

CANADA FX DEBT-C$ stabilizes with oil after hitting near 2-month low

    * Canadian dollar at C$1.3398, or 74.64 U.S. cents
    * Loonie touches its weakest since Jan. 4 at C$1.3422
    * Bond prices slightly lower across the yield curve

    TORONTO, March 3 (Reuters) - The Canadian dollar stabilized
on Friday after hitting a nearly two-month low against its U.S.
counterpart, helped by a recovery in oil prices, while the
greenback pared some recent gains ahead of a speech by Federal
Reserve Chair Janet Yellen
    Yellen is expected to reinforce expectations that the Fed
will hike U.S. interest rates later this month.             
    The U.S. dollar        fell against a basket of major
currencies as far-right candidate Marine Le Pen's chances in
France's presidential election dimmed and economic data in
Europe continued to point to a brightening recovery.
    U.S. crude        prices were up 0.34 percent at $52.79 a
barrel, recouping some of the previous session's losses, as a
weaker U.S. dollar encouraged buying, but investors remained
cautious after Russian production figures showed weak compliance
with a global deal to cut output.      
    Oil is one of Canada's major exports.
    At 9:21 a.m. (1421 GMT), the Canadian dollar          was
trading at C$1.3398 to the greenback, or 74.64 U.S. cents,
slightly stronger than Thursday's close of C$1.3399, or 74.63
U.S. cents.
    The currency's strongest level of the session was C$1.3379,
while it touched its weakest since Jan. 4 at C$1.3422.
    Increased expectations for Fed rate hikes overshadowed on
Thursday data that showed stronger-than-expected growth for
Canada's economy in the fourth quarter, with the performance not
expected to prod the Bank of Canada to change its cautious
stance on interest rates.             
     On Wednesday, the Bank of Canada held rates steady as it
stayed focused on the "significant uncertainties" facing the
economy, including the policies of U.S. President Donald Trump.
    Expected policy divergence between the Bank of Canada and
the Fed will pressure the Canadian dollar over the coming
months, a Reuters poll predicted.             
    Bank of Canada Senior Deputy Governor Carolyn Wilkins will
give remarks on a panel at Yale Law School at 14:45 p.m. ET
(1945 GMT) on the central bank perspective of blockchain and the
future of finance.
    Canadian government bond prices were slightly lower across
the yield curve, with the two-year            down 0.5 Canadian
cent to yield 0.775 percent and the 10-year             falling
8 Canadian cents to yield 1.706 percent.

 (Reporting by Fergal Smith; Editing by Meredith Mazzilli)

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