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CANADA FX DEBT-C$ dips against stronger greenback as oil prices fall

Published 2018-01-29, 04:37 p/m
© Reuters.  CANADA FX DEBT-C$ dips against stronger greenback as oil prices fall
USD/CAD
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MKC
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CL
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CA2YT=RR
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CA10YT=RR
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DXY
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* Canadian dollar at C$1.2334, or 81.08 U.S. cents

* Bond prices mixed across the yield curve

* 10-year yield touches more than three-year high

By Fergal Smith

TORONTO, Jan 29 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Monday as oil prices fell and the greenback broadly climbed, while global bond yields reached multi-year highs.

At 4 p.m. EST (2100 GMT), the Canadian dollar CAD=D4 was trading at C$1.2334 to the greenback, or 81.08 U.S. cents.

The currency traded in a range of $1.2306 to C$1.2361. On Thursday, it touched its strongest in more than four months at C$1.2283.

"What we are seeing today is primarily a squeeze on the U.S. dollar, said Mark McCormick (NYSE:MKC), North American head of FX strategy at TD Securities. "A lot of bad news is baked into the U.S. dollar ... we have gone too far too fast."

The U.S. dollar .DXY rebounded from a three-year low on Friday against a basket of major currencies as U.S. bond yields climbed and traders waited for a Federal Reserve meeting and a U.S. jobs report later in the week. stronger greenback and rising U.S. crude output weighed on the price of oil, one of Canada's major exports. U.S. crude oil prices settled 0.9 percent lower at $65.56 a barrel. President Donald Trump's trade chief dismissed Canadian proposals for unblocking talks to modernize the North America Free Trade Agreement but pledged to stay at the table, easing concerns about a potentially imminent U.S. withdrawal from the trilateral pact. raised bullish bets on the Canadian dollar for a third straight week, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed on Friday. As of Jan. 23, net long positions rose to 22,557 contracts from 17,556 a week earlier.

Canadian government bond prices were mixed across the yield curve. The two-year CA2YT=RR was flat to yield 1.826 percent and the 10-year CA10YT=RR declined 13 Canadian cents to yield 2.282 percent.

The 10-year yield reached its highest since September 2014 at 2.314 percent as investors braced for major central banks to step back from ultra-easy monetary policies.

Canadian gross domestic product data for November is due on Wednesday. The economy is forecast to have grown by 0.4 percent, a Reuters poll shows, regaining momentum after pausing in October.

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