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