CANADA FX DEBT-C$ steady as oil falls then rallies, Fed cautious
(Adds comment, details on Fed, oil; updates prices to close) * Canadian dollar settles at C$1.2811, or 78.06 U.S. cents * Bond prices lower across the maturity curve By Alastair Sharp TORONTO, June 21 (Reuters) - The Canadian dollar settled barely weaker against its U.S. counterpart on Tuesday, a respite from the rollercoaster in risk appetite of recent days triggered by speculation over Britain's future in the European Union. The commodity-linked currency was buffeted by oil prices, which weighed before turning positive post-settlement on data showing a bigger-than-expected draw in U.S. inventory. It also likely got a boost from comments from U.S. Federal Reserve Chair Janet Yellen that potential U.S. rate hikes this year would hinge on a rebound in hiring needed to convince policymakers the U.S economy is not faltering. The Canadian dollar settled at C$1.2811 to the greenback, or 78.06 U.S. cents, very slightly weaker than Monday's close of C$1.2809, or 78.07 U.S. cents. It traded in a tight range, between C$1.2825 and C$1.2763, its strongest level since June 13. The currency had weakened for most of last week before changing direction in the prior two sessions as momentum in the British EU referendum campaign shifted from "leave" to "remain." North American stock markets were also little changed, as opinion polls and surveys showed the likely outcome of Britain's referendum balancing on a knife-edge. "People have pared back their risk, they have their views and are waiting to see what happens" with the vote on Thursday, said Darcy Browne, managing director of foreign exchange sales at CIBC Capital Markets. He said their clients are currently more interested in positioning on rates than currencies because of the uncertainty. Canadian government bond prices were lower across the maturity curve, with the two-year price down 4 Canadian cents to yield 0.608 percent and the benchmark 10-year falling 37 Canadian cents to yield 1.251 percent. Domestic retail sales data is due on Wednesday. Retail sales are expected to have climbed by 0.9 percent in April after falling in March. (Reporting by Fergal Smith; Editing by Nick Zieminski and Chris Reese)
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