May 1, 2019 / 1:29 PM / 3 months ago

CANADA FX DEBT-C$ retreats from 8-day high ahead of FOMC decision

    * Canadian dollar dips 0.1% against the greenback
    * Price of U.S. oil falls 0.1%
    * Canadian bond prices trade mixed across the yield curve

    TORONTO, May 1 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Wednesday, pulling back from an
earlier eight-day high as oil prices fell and as investors
awaited an interest rate decision from the U.S. Federal Reserve.
    The price of oil, one of Canada's major exports, was
pressured by an unexpected rise in U.S. crude inventories. U.S.
crude        prices were down 0.1% at $63.83 a barrel.       
    The Fed, leaning back against pressure from President Donald
Trump to slash interest rates, is expected to leave borrowing
costs unchanged on Wednesday as it maintains a "patient"
monetary policy stance amid strong economic growth.             
    At 9:19 a.m. (1319 GMT), the Canadian dollar          was
trading 0.1% lower at 1.3400 to the greenback, or 74.63 U.S.
cents. The currency touched its strongest intraday level since
April 23 at 1.3378.     
    The eight-day high for the loonie came one day after Bank of
Canada Governor Stephen Poloz said the Canadian economy faces
some headwinds but there was good reason to believe growth would
accelerate in the second half of this year.             
    Canada's central bank is buying time for the economy to exit
a soft patch without the aid of lower interest rates, economists
say, by forecasting growth so weak it would take a surprise blow
to activity for the economy to undershoot its estimates.
            
    Canadian government bond prices were mixed across the yield
curve, with the two-year            flat to yield 1.563% and the
10-year             rising 5 Canadian cents to yield 1.707%.

 (Reporting by Fergal Smith; editing by Jonathan Oatis)
  
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