March 13, 2019 / 8:00 PM / 3 months ago

CANADA FX DEBT-C$ notches nine-day high as global investors grow optimistic

 (Adds strategist quote and details throughout; updates prices)
    * Canadian dollar rises 0.5 percent against the greenback
    * Price of U.S. oil climbs 2.4 percent
    * Canadian home prices fall 0.4 percent in February
    * Bond prices decline across the yield curve

    By Fergal Smith
    TORONTO, March 13 (Reuters) - The Canadian dollar
strengthened to a nine-day high against its U.S. counterpart on
Wednesday as rising stocks and oil prices offset domestic data
showing the fifth consecutive monthly decline for home prices.
    U.S. stocks rose broadly after U.S. producer price data
backed the Federal Reserve's patient stance on future interest
rate hikes.             
    "Stocks and oil are both at the best levels of the year and
that signifies optimism about growth; it's a tailwind for the
Canadian dollar," said Adam Button, chief currency analyst at
Forex Live.
    The price of oil, one of Canada's major exports, rose as
U.S. crude inventories unexpectedly fell and an official
forecast of crude oil supply growth from the world's top
producer was revised lower. U.S. crude oil futures       
settled 2.4 percent higher at $58.26 a barrel.             
    At 3:37 p.m. (1937 GMT), the Canadian dollar          was
trading 0.5 percent higher at 1.3296 to the greenback, or 75.21
U.S. cents, its strongest since March 4.
    Gains for the loonie came after U.S. Trade Representative
Robert Lighthizer said on Tuesday that the United States is
working on a plan to lift tariffs from Mexican and Canadian
steel and aluminum.             
    In domestic data, the Teranet-National Bank Composite House
Price Index showed Canadian home prices fell 0.4 percent last
month from January.
    Canada's once-hot housing market has softened since the
start of last year, weighed by tighter mortgage rules and five
interest rate hikes from the Bank of Canada since July 2017.
                
    Bank of Canada Senior Deputy Governor Carolyn Wilkins is due
to speak on Thursday. Last week, the central bank said it
expects the Canadian economy will be weaker in the first half of
2019 than it projected in January, and that it was watching
developments in household spending, oil markets and global
trade.             
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries after U.S. data showed
new orders for U.S.-made capital goods in January posted their
largest increase in six months.             
    The 10-year             fell 17 Canadian cents to yield
1.758 percent. On Tuesday, the 10-year yield touched its lowest
intraday since June 2017 at 1.728 percent.

 (Reporting by Fergal Smith
Editing by James Dalgleish)
  
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