CANADA FX DEBT-C$ firms as oil steadies, China yuan move dominates

Wed Aug 12, 2015 10:01am EDT
 
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* Canadian dollar at C$1.2995 or 76.95 U.S. cents
    * Bond prices higher across the maturity curve

    TORONTO, Aug 12 (Reuters) - The Canadian dollar rallied
against its U.S. counterpart on Wednesday, buoyed by steady oil
prices and a weaker greenback, while Chinese currency moves
continued to dominate market focus.
    Crude prices, hit hard on Tuesday, rose after a bullish
report by the International Energy Agency (IEA) on rising oil
demand outweighed the bearish impact of another batch of
disappointing Chinese economic data and further weakening in the
country's currency. Canada is a major oil producer.
    Questions over whether China's yuan devaluation will derail
the U.S. Federal Reserve's plans to hike interest rates this
year, possibly as early as September, helped pushed the U.S.
dollar sharply lower against a basket of major currencies.
        
    * At 9:46 a.m. ET (1346 GMT), the Canadian dollar 
was trading at C$1.2995 to the greenback, or 76.95 U.S. cents,
stronger than the Bank of Canada's official close of C$1.3104,
or 76.31 U.S. cents.
    * The currency traded between C$1.2952 and C$1.3158 so far
on Wednesday, the third session in a row in which the loonie
experienced a more than 1 percent swing. With China dominating
the FX market this week, however, the currency, widely expected
to weaken further, was mostly rangebound between C$1.30 and    
C$1.32.
    * Canadian home prices rose 1.2 percent in July from June
and up 5.1 percent from a year earlier, the Teranet-National
Bank Composite House Price Index showed. 
    * U.S. crude prices, which fell more than 4 percent
on Tuesday, were up 1.37 percent to $43.67, while Brent crude
 added 1.06 percent to $49.7. 
    * The Canadian dollar, which was stronger than many of its
key currency counterparts, is expected to trade between C$1.2960
and C$1.3060 against the U.S. dollar on Wednesday, according to
RBC Capital Markets.
    * Canadian government bond prices were higher across the
maturity curve, with the two-year price up 1.5
Canadian cents to yield 0.414 percent and the benchmark 10-year
 rising 8 Canadian cents to yield 1.387 percent.
    * The Canada-U.S. two-year bond spread narrowed to -24.3
basis points, while the 10-year spread narrowed to -73.8 basis
points.
    

 (Reporting by Solarina Ho; Editing by Frances Kerry)