CANADA FX DEBT-C$ regains ground on euro gains, firmer oil

Tue Jun 2, 2015 4:31pm EDT
 
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* Canadian dollar at C$1.2408, or 80.59 U.S. cents
    * Bond prices mixed across the maturity curve

 (Updates to close)
    By Andrea Hopkins
    TORONTO, June 2 (Reuters) - The Canadian dollar gained more
than a cent against its U.S. counterpart on Tuesday on the back
of a rising euro currency and buoyant crude oil prices, erasing
a week of losses. 
    The euro rose more than 2 percent against the U.S. dollar
after an above-forecast rise in euro zone inflation. U.S. stocks
rose, helped by the dollar's decline, and bond yields rose while
investors searched for clarity on Greece's debt crisis.
 
    "The catalyst to the U.S. dollar weakness is in the events
in the euro zone, that has inspired some long dollar positions
to be squared," said Jack Spitz, managing director of foreign
exchange at National bank Financial.
    "The euro is up over 2 percent and the Canadian dollar is
still up almost a full percent. It's been an active and volatile
session," he added. 
    Oil rose as much as 2 percent, driven by the weak dollar and
expectations that U.S. crude supplies could have fallen last
week for a fifth straight week. 
    Canada is a major oil exporting country, and its currency
has been especially sensitive to prices, which have plunged in
the last 12 months.
    The Canadian dollar ended the North American
session at C$1.2408, or 80.59 U.S. cents, more than one Canadian
cent stronger than the Bank of Canada's official close on Monday
of C$1.2535, or 79.78 U.S. cents.
    It climbed as high as C$1.2368 during the session, its
strongest point since May 26.
    Canadian government bond prices were mixed across the
maturity curve, with the two-year price off 4
Canadian cents to yield 0.590 percent and the benchmark 10-year
 falling 73 Canadian cents to yield 1.712 percent.

 (Additional reporting by Alastair Sharp; Editing by Nick
Zieminski and Tom Brown)