CANADA FX DEBT-C$ strengthens to 11-day high; pares gains as oil falls

Published 2016-09-06, 10:21 a/m
© Reuters.  CANADA FX DEBT-C$ strengthens to 11-day high; pares gains as oil falls
USD/CAD
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CL
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CA2YT=RR
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CA10YT=RR
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* Canadian dollar at C$1.2915, or 77.43 U.S. cents

* Bond prices slightly higher across the maturity curve

TORONTO, Sept 6 (Reuters) - The Canadian dollar strengthened to an 11-day high against its broadly weaker U.S. counterpart on Tuesday, although some gains were pared as oil fell.

The loonie has strengthened since data on Friday showed that exports jumped by 3.4 percent in July, while a slowdown in U.S. employment growth could rule out a rate increase from the Federal Reserve this month. investors are betting the Bank of Canada will leave its policy rate on hold at Wednesday's interest rate decision, data from overnight index swaps shows. BOCWATCH

Oil fell on receding hopes for imminent action to tackle a global supply glut. U.S. crude CLc1 prices were down 0.92 percent at $44.03 a barrel.

At 9:52 a.m. EDT (1352 GMT), the Canadian dollar CAD=D4 was trading at C$1.2915 to the greenback, or 77.43 U.S. cents, slightly stronger than Monday's close of C$1.2930, or 77.34 U.S. cents, according to Reuters data.

Its official close on Friday before the Labour Day holiday was C$1.2990, or 76.98 U.S. cents.

The currency's weakest level on Tuesday was C$1.2933, while it touched its strongest since Aug. 26 at C$1.2887.

Speculators raised bullish bets on the Canadian dollar for the second straight week, Commodity Futures Trading Commission data showed on Friday. Net long Canadian dollar positions rose to 22,400 contracts in the week ended Aug. 30 from 16,734 contracts in the prior week. government bond prices were slightly higher across the maturity curve, with the two-year CA2YT=RR bond up 1 Canadian cent to yield 0.588 percent and the benchmark 10-year CA10YT=RR rising 7 Canadian cents to yield 1.055 percent.

Earlier in the day, the 10-year yield reached its highest since Aug. 22 at 1.113

Canada's August employment report is due on Friday. Investors will be looking to see whether the labor market can recover some of the 31,200 jobs it unexpectedly lost the month before. ECONCA

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