June 4, 2019 / 9:10 PM / 3 months ago

CANADA FX DEBT-C$ climbs to 2-week high as investors bet on Fed easing

 (Adds strategist quote and details throughout, updates prices)
    * Canadian dollar rises 0.3% against the greenback
    * Loonie touches its strongest since May 22 at 1.3381
    * Price of U.S. oil increases 0.4%
    * Canadian bond prices fall across a steeper yield curve

    By Fergal Smith
    TORONTO, June 4 (Reuters) - The Canadian dollar strengthened
to its highest level in nearly two weeks against its U.S.
counterpart on Tuesday, as oil prices rose and speculation the
Federal Reserve would soon cut interest rates weighed on the
greenback.
    At 4:08 p.m. (2008 GMT), the Canadian dollar          was
trading 0.3% higher at 1.3394 to the greenback, or 74.66 U.S.
cents. The currency touched its strongest level since May 22 at
1.3381.
    "The bulk of the move" for the Canadian dollar was due to
broader pressure on the greenback as the U.S. Treasury market
prices in a number of interest rate cuts from the Federal
Reserve, said Mazen Issa, a senior FX strategist at TD
Securities.
    The U.S. dollar        hit its lowest since mid-April as
Federal Reserve Chair Jerome Powell alluded to the possibility
of an interest rate cut in the face of economic risks, including
the global trade war.             
    The prospect of a U.S. rate cut helped boost global stocks
         and commodity prices, with U.S. crude oil futures
       settling 0.4% higher at $53.48 a barrel. Oil is one of
Canada's major exports.                 
    Canadian Prime Minister Justin Trudeau, asked about U.S.
President Donald Trump's threat to impose tariffs on Mexico,
said Ottawa would move ahead in a responsible way to ratify a
new North American free trade pact.
    Canadian government bond prices were lower across a steeper
yield curve, with the two-year            down 5 Canadian cents
to yield 1.386% and the 10-year             falling 53 Canadian
cents to yield 1.474%.
    On Monday, the 10-year yield hit its lowest since June 2017
at 1.419%.
    Canada's trade data for April is due on Thursday and the May
jobs report is due on Friday.

 (Reporting by Fergal Smith; Editing by Bill Trott and Peter
Cooney)
  
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