CANADA FX DEBT-C$ strengthens to more than 3-month high; Fed in focus
(Adds details throughout, strategist comment, closing figures) * Canadian dollar at C$1.2101, or 82.64 U.S. cents * Bond prices mixed across the maturity curve By Solarina Ho TORONTO, April 27 (Reuters) - The Canadian dollar rallied against all major currency counterparts on Monday, at one point touching its strongest level since January against the greenback, as crude prices clung near 2015 highs and the U.S. dollar index slid to a three-week low. The price of crude, a major Canadian export, gyrated through a volatile trading session, with the Yemen conflict and falling U.S. rig counts offsetting the caution surrounding lofty global supply levels. But prices, which have plunged dramatically since last summer, held close to 2015 highs, with U.S. crude settling at $56.99 a barrel and lending support to the commodities-linked Canadian dollar. "It's very quiet and not much in the way of data," said Mark Chandler, head of Canadian fixed income and currency strategy at RBC Capital Markets. "Even though we've gotten no fresh moves up in energy prices, they look like they're stabilizing." The Canadian dollar finished trading at C$1.2101 to the greenback, or 82.64 U.S. cents, stronger than the Bank of Canada's official close on Friday of C$1.2170, or 82.17 U.S. cents. The loonie hit C$1.2080 at one point, its strongest level since January 21 when the Bank of Canada stunned markets with an unexpected 25 basis point interest rate cut. The currency had retreated to six-year lows earlier this year, but began rebounding again earlier this month after the Bank of Canada offered a more optimistic view of the economy for the second half of 2015. Lukewarm first quarter U.S. economic data, which has put the greenback under some pressure, also helped the loonie recently. First-quarter U.S. growth numbers are due midweek, just ahead of the Federal Reserve's monetary policy statement. Both events could drive the U.S. dollar and by extension, the Canadian dollar, Chandler said. Investors will be looking for clues on the Fed's view of the economy and when a rate hike may come. Markets will also be eying comments from Bank of Canada Governor Stephen Poloz and Senior Deputy Governor Carolyn Wilkins about the economy and the impact of crude prices when they speak before a House of Commons finance committee on Tuesday. Canadian government bond prices were mixed across the maturity curve, with longer-term debt falling. The two-year price was down 3 Canadian cents to yield 0.647 percent, and the benchmark 10-year slipped 23 Canadian cents to yield 1.466 percent. The Canada-U.S. two-year bond spread was 12.7 basis points, while the 10-year spread was -46.2. (Editing by Meredith Mazzilli)
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