CANADA FX DEBT-C$ retreats with crude prices

Wed Feb 4, 2015 9:59am EST
 
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* Canadian dollar at C$1.2482 or 80.12 U.S. cents
    * Bond prices mostly lower across the maturity curve

    By Solarina Ho
    TORONTO, Feb 4 (Reuters) - After jumping 2.5 percent over
the first two days of the week,  the Canadian dollar dropped
against its U.S. counterpart on Wednesday as oil prices gave
back some of their recent gains due to new builds in U.S. crude
stock levels.
    Battered oil prices had rebounded some 19 percent since
Thursday, giving the commodities-linked Canadian dollar a big
lift. Canada is a major exporter of oil and its currency has
been especially sensitive over the last seven months to crude
prices, which have fallen on too much supply and output, and not
enough demand.
    U.S. crude futures were trading below C$52 a barrel on
Wednesday, after an industry report showed U.S. crude stocks
rose by more than 6 million barrels last week. 
    "All those markets, after a real hard reversal, they're
settling down," said Greg Anderson, global head of foreign
exchange strategy in New York BMO Capital Markets.
    "Oil is off a couple of dollars, so no surprise that
USD/CAD's moved back up towards C$1.25. I think that's about the
level where it would settle down."
    At 9:40 a.m. ET (1440 GMT), the Canadian dollar was
at C$1.2482 to the greenback, or 80.12 U.S. cents, softer than
Tuesday's close of C$1.2396, or 80.67 U.S. cents.
    The loonie is expected to stay around current levels until
at least Friday, when January employment figures from the United
States and Canada are released. Canadian trade data for
December, due on Thursday, could also provide direction.
    Canadian government bond prices were mostly weaker across
the maturity curve, with the two-year off 1.5
Canadian cents to yield 0.439 percent and the benchmark 10-year
 slipping 28 Canadian cents to yield 1.338 percent.

 (Reporting by Solarina Ho; Editing by Peter Galloway)