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CANADA FX DEBT-C$ gains limited by oil price reversal; data eyed

Published 2015-11-30, 04:53 p/m
© Reuters.  CANADA FX DEBT-C$ gains limited by oil price reversal; data eyed
USD/CAD
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CL
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CA2YT=RR
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CA10YT=RR
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(Adds analyst comment, details; updates prices)
* Canadian dollar ends at C$1.3353, or 74.89 U.S. cents
* C$ had earlier dropped to one-week low vs greenback
* Bond prices mixed across the maturity curve

By Alastair Sharp
TORONTO, Nov 30 (Reuters) - The Canadian dollar gained
against the U.S. dollar on Monday as it broadly tracked
movements in the price of crude oil, with attention shifting to
a slew of upcoming data and events, including a Bank of Canada
interest rate decision on Wednesday.
The loonie, as Canada's currency is colloquially known,
pared its earlier strength in afternoon trade as crude gave up
its gains to settle lower. O/R
"We're still in a pretty binary market where oil prices are
having a big impact," said Don Mikolich, executive director for
foreign exchange sales at CIBC Capital Markets.
The Canadian dollar CAD=D4 settled at C$1.3353 to the
greenback, or 74.89 U.S. cents, stronger than Friday's official
close of C$1.3372, or 74.78 U.S. cents.
The currency's strongest level of the session was C$1.3312,
while its weakest was C$1.3393, a one-week low.
The Bank of Canada is widely expected to hold interest rates
at 0.50 percent through 2016, according to a Reuters poll.

That contrasts with the U.S. Federal Reserve, as many bet it
will raise rates in December. Analysts and investors are hoping
to get a reading on the pace of any hikes to follow.
"If oil prices stay at $40 or above and the Fed gets a bit
dovish then I think C$1.36 is the high and by the end of the
year (2016) we're looking towards C$1.30 or maybe even the high
C$1.20s," CIBC's Mikolich said.
He said forecasts for an even weaker loonie would require
further weakness in oil prices and a more aggressive Fed.
Data on Tuesday is expected to confirm that Canada's economy
pulled out of recession in the third quarter, with annualized
growth forecast to ramp up to 2.3 percent.
But a Reuters poll forecasts a loss of 10,000 jobs in a
November employment report due on Friday.
Canada's current account deficit shrank in the third
quarter, but not by as much as expected.
Against the euro the loonie touched C$1.4052, its strongest
level since July, in anticipation of further policy easing
measures from the European Central Bank at a meeting on
Thursday.
Canadian government bond prices were mixed across the
maturity curve, with the two-year CA2YT=RR price up half a
Canadian cent to yield 0.629 percent and the benchmark 10-year
CA10YT=RR falling 2 Canadian cents to yield 1.568 percent. The
20-year issue jumped almost 17 cents to yield 2.259 percent.

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