CANADA FX DEBT-C$ strengthens as oil bounces higher

Tue Nov 3, 2015 5:13pm EST
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(Adds comment, updates prices)
    * Canadian dollar at C$1.3052, or 76.62 U.S. cents
    * Bond prices lower across the maturity curve

    TORONTO, Nov 3 (Reuters) - The Canadian dollar recorded its
strongest close in two weeks against the U.S. dollar on Tuesday,
as a jump in crude oil prices boosted the commodity-linked
currency above the broadly stronger greenback.
    The U.S. dollar advanced in tandem with higher Treasury
yields as investors increased bets the Federal Reserve will
tighten U.S. monetary policy in December, ahead of public
appearances from several Fed policymakers on Wednesday.
    However, the rally in crude oil to a three-week high helped 
the Canadian dollar outperform. 
    U.S. crude prices were up 3.9 percent to $47.94 a
barrel, while Brent crude added 3.5 percent to $50.51.
    "The sharp rally in crude oil prices is playing a role here,
it's why Canada is second only to the Australian dollar,
following the (reserve Bank of Australia) overnight that left
rates unchanged, in terms of outperforming against the U.S.
currency," said David Tulk, chief Canada macro strategist at TD
    The Canadian dollar closed at C$1.3052 against the
greenback, or 76.62 U.S. cents, stronger than Monday's close of
C$1.3099, or 76.34 U.S. cents. 
    The pair traded as high as C$1.3165 before pushing through
last week's trough to touch $1.3039, the loonie's strongest
level since Oct. 21.
    Canadian government bond prices were mixed across the
maturity curve, with the two-year down 3.5 Canadian
cents to yield 0.599 percent and the benchmark 10-year
 falling 38 Canadian cents to yield 1.616 percent.
    Investors are awaiting U.S. and Canadian trade data on
Wednesday as well as U.S. and Canadian employment data at the
end of the week. In Reuters polls, the median expectation is for
the trade deficit to narrow to C$1.90 billion in September and
for 10,000 Canadian jobs to have been added in October.

 (Reporting by Alastair Sharp and Fergal Smith; Editing by
Meredith Mazzilli and James Dalgleish)