CANADA FX DEBT-Canadian dollar lifted by oil rally, weaker US$
(Adds updated prices, comment from strategist, details) * Canadian dollar at C$1.2018 or 83.21 U.S. cents * Bond prices mixed across the maturity curve By Solarina Ho TORONTO, May 12 (Reuters) - Higher crude prices helped the Canadian dollar strengthen against a broadly weaker U.S. dollar on Tuesday, but trading stayed within its recent band due to a dearth of domestic economic data to inspire moves. The weaker greenback, ongoing conflict in Yemen, and a forecast by the Organization of the Petroleum Exporting Countries for marginally higher growth in 2015 in world oil demand all helped pushed the price of oil, a key Canadian export, higher. U.S. crude rose 3 percent $61.04, while Brent crude was up 3.3 percent at $67.09. "Today's strength in the Canadian dollar, part of it is from West Texas (oil price) getting a bit above $60 again," said Amo Sahota, director at Klarity FX in San Francisco, adding that global macro themes were also affecting markets. U.S. and German government bonds sold off, and drove yields for benchmark 10-year U.S. Treasuries to their highest since mid-November, with German 10-year yields rising even more strongly. The Canadian dollar was at C$1.2018 to the greenback, or 83.21 U.S. cents, stronger than the Bank of Canada's official close of C$1.2110, or 82.58 U.S. cents, on Monday. It traded between C$1.1979 and C$1.2107 during the session. Sahota said the Canadian dollar could make further gains before the greenback resumes its climb on expectations the Federal Reserve will hike interest rates sometime this year. The Canadian economic calendar remains lean this week, but U.S. data due on Wednesday, including retail-sales and crude-inventory figures, should provide stimulus. "They're important data points; they're going to tell us something about growth in the U.S., about oil inventory, and business sentiment," Sahota said. Canadian government bond prices were higher across the maturity curve. The two-year price was up 2 Canadian cents to yield 0.697 percent and the benchmark 10-year is up 19 Canadian cents to yield 1.801. The Canada-U.S. two-year bond spread was 9.7 basis points, while the 10-year spread was -45.7 basis points. (Reporting by Solarina Ho; Editing by Peter Galloway)
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