CANADA FX DEBT-C$ firms against greenback on higher oil, drops vs euro

Thu Dec 3, 2015 9:36am EST
 
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* Canadian dollar at C$1.3339, or 74.97 U.S. cents
    * Bond prices lower across the maturity curve

    TORONTO, Dec 3 (Reuters) - The Canadian dollar firmed
against the greenback, helped by a rebound in crude oil prices,
but fell sharply against the euro after additional easing
measures from the European Central Bank were less aggressive
than some investors had expected.
    Oil prices rose from near-2015 lows after a report sourced
to a senior OPEC delegate said Saudi Arabia would next year
propose a deal to balance oil markets with non-OPEC help.
 
    The European Central Bank cut its deposit rate to -0.3
percent from its existing -0.2 percent and extended
its asset purchase program to run until the end of March 2017.
 
    At 9:12 a.m. EST (1412 GMT), the Canadian dollar 
was trading at C$1.3339 to the greenback, or 74.97 U.S. cents,
slightly stronger than Wednesday's close of C$1.3349, or 74.91
U.S. cents.
    The currency rebounded from a nine-day low on Wednesday
after the Bank of Canada used less dovish language in its policy
statement than some expected. 
    Against the euro, the Canadian dollar tumbled to C$1.4396,
having touched C$1.4494, its weakest level in nearly five weeks.
    U.S. crude prices were up 1.10 percent to $40.38 a
barrel, while Brent crude added 2.05 percent to
$43.36.    
    Canadian government bond prices were lower across the
maturity curve, tracking weakness in German Bunds after the
European Central Bank disappointed some investors.
    The two-year price down 3.5 Canadian cents to
yield 0.64 percent and the benchmark 10-year falling
46 Canadian cents to yield 1.565 percent.
    The Canada-U.S. two-year bond spread was little changed at
-32.2 basis points, while the 10-year spread was 1.3 basis
points wider at -67.6 basis points.
    Federal Reserve Chair Janet Yellen will testify on the
economic outlook before the congressional Joint Economic
Committee at 10.00 a.m. EST (1500 GMT) after having said on
Wednesday that she was "looking forward" to a U.S. interest rate
hike.    
    Canada's November employment report will be released on
Friday and is expected to show that jobs fell 10,000 after
jumping 44,400 in October, according to a Reuters poll.

 (Reporting by Fergal Smith; Editing by Bernadette Baum)