June 17, 2019 / 2:29 PM / 3 months ago

CANADA FX DEBT-Loonie firms ahead of speech by Bank of Canada official

    * Canadian dollar rises 0.1% against the greenback
    * Price of U.S. oil decreases 0.6%
    * Foreign investors sell Canadian securities in April
    * Canadian bond prices dip across much of the yield curve

    TORONTO, June 17 (Reuters) - The Canadian dollar edged
higher against its U.S. counterpart on Monday, paring some of
last week's decline ahead of a speech by a Bank of Canada
official and as investors awaited a Federal Reserve policy
meeting later in the week.
    Bank of Canada deputy governor Lawrence Schembri will speak
about renewing the central bank's inflation target. The central
bank, which will publish Schembri's prepared remarks at 14:30 ET
(1830 GMT), said last month there was evidence that a slowdown
in the domestic economy was temporary, signaling it would remain
on the sidelines as it monitors economic developments.
    Meanwhile, the U.S. Federal Reserve, facing fresh demands by
President Donald Trump to cut interest rates, is expected to
leave borrowing costs unchanged at an interest rate decision on
Wednesday but possibly lay the groundwork for a rate cut later
this year.             
    At 10:09 a.m. (1409 GMT), the Canadian dollar          was
trading 0.1% higher at 1.3403 to the greenback, or 74.61 U.S.
cents.
    The currency, which fell 1.1% last week, traded in a narrow
range of 1.3401 to 1.3419. On Friday, the loonie touched its
weakest in more than one week at 1.3424.
    Foreign investors sold a net C$12.80 billion in Canadian
securities in April, led by equities, following a revised C$1.56
billion total divestment in March, Statistics Canada said on
Monday.             
    Still, data from the U.S. Commodity Futures Trading
Commission and Reuters calculations showed on Friday that
speculators have cut their bearish bets on the Canadian dollar
to the lowest since December. As of June 11, net short positions
had fallen to 32,840 contracts from 41,759 in the prior week.
                   
    The price of oil, one of Canada's major exports, slipped on
Monday as signs of an economic slowdown amid international trade
disputes began to outweigh supply fears. U.S. crude oil futures
       were down 0.6% at $52.22 a barrel.
    Canada looks set to approve a hotly-debated plan to expand
an oil pipeline this week, people familiar with the process told
Reuters, but the move is unlikely to help Prime Minister Justin
Trudeau rebuild flagging support ahead of an October election.
                
    Canadian government bond prices were lower across much of
the yield curve, with the two-year            down 1.5 Canadian
cents to yield 1.390% and the 10-year             falling 8
Canadian cents to yield 1.444%.
    Canada's inflation report for May is due on Wednesday.

 (Reporting by Fergal Smith
Editing by Susan Thomas)
  
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