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CANADA FX DEBT-Canadian dollar rebounds from 10-day low as oil rallies

 (Adds strategist quotes and details throughout; updates prices)
    * Canadian dollar rises 0.4% against the greenback
    * Loonie trades in a range of 1.3142 to 1.3212
    * Price of U.S. oil settles 2.6% higher
    * Canadian bond yields ease across much of a flatter curve

    By Fergal Smith
    TORONTO, Oct 27 (Reuters) - The Canadian dollar strengthened
against its U.S. counterpart on Tuesday as oil prices rose and
investors awaited an interest rate decision by the Bank of
Canada, with the currency recouping much of the previous day's
    Canada's central bank is due to make an interest rate
decision and update its economic outlook on Wednesday. The
central bank has said it will leave rates at a record low of
0.25% until its 2% inflation target is achieved sustainably,
which it does not expect for at least two years.
    With the Bank of Canada on the sidelines, the Canadian
dollar's prospects "increasingly lie with broader risk
sentiment," said Tony Valente, a senior FX dealer at
    The one-month rolling correlation between the loonie and the
benchmark S&P 500 has climbed to 0.8 from 0.3 in early October,
Refinitiv Eikon data showed, indicating the currency and the
stock market are moving largely in the same direction.        
    Wall Street's main indexes steadied on Tuesday following the
S&P 500's worst day in a month, while U.S. crude oil futures
       settled 2.6% higher at $39.57 a barrel as companies shut
down some U.S. Gulf of Mexico oil production ahead of an
approaching storm.                         
    Oil is one of Canada's major exports. The move higher in
crude prices helped the loonie "to catch a bid," Valente said.
    The Canadian dollar        was trading 0.4% higher at 1.3159
to the greenback, or 75.99 U.S. cents, having traded in a range
of 1.3142 to 1.3212.
    On Monday, the currency hit a 10-day low at 1.3225 as
surging coronavirus cases and doubts about a U.S. coronavirus
relief package weighed on investor sentiment.    
    Canadian government bond yields were lower across much of a
flatter curve in sympathy with U.S. Treasuries on Tuesday. The
10-year             fell 2.2 basis points to 0.606%.

 (Reporting by Fergal Smith
Editing by Nick Zieminski and Jonathan Oatis)