CANADA FX DEBT-C$ strengthens vs broadly weaker greenback as oil recovers

Tue Aug 2, 2016 9:59am EDT
 
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* Canadian dollar at C$1.3039, or 76.69 U.S. cents
    * Bond prices lower across the maturity curve

    TORONTO, Aug 2 (Reuters) - The Canadian dollar strengthened
against its U.S. counterpart on Tuesday as oil prices recovered
and as weaker-than-expected U.S. data last week weighed on the
greenback.
    Oil rebounded after falling by up to 10 percent in one week,
but investors remained concerned about oversupply weighing on
prices. U.S. crude prices were up 1.72 percent at $40.75
a barrel. 
    The U.S. dollar fell to a five-week low against a
basket of major currencies. The greenback has been sold steadily
since surprisingly weak U.S. second-quarter growth numbers last
week. 
    At 9:24 a.m. EDT (1324 GMT), the Canadian dollar 
was trading at C$1.3039 to the greenback, or 76.69 U.S. cents,
stronger than Monday's Reuters close of C$1.3120, or 76.22 U.S.
cents. The loonie's official close on Friday before a civic
holiday on Monday was C$1.3056, OR 76.59 U.S. cents.
    The currency's strongest level of the session was C$1.3038,
while its weakest was C$1.3143.
    Speculators increased bullish bets on the Canadian dollar
for the fifth straight week, Commodity Futures Trading
Commission data showed on Friday. Net long Canadian dollar
positions rose to 23,180 contracts in the week ended July 26
from 22,068 contracts in the prior week. 
    Canadian government bond prices were much lower across the
maturity curve, with the two-year price down 6.5
Canadian cents to yield 0.573 percent and the benchmark 10-year
 falling 76 Canadian cents to yield 1.108 percent.
    On Friday, the 10-year yield hit a two-week low at 1.023
percent.
    Losses for global bond markets came as Japan's cabinet
approved a fiscal stimulus package on Tuesday to revive the
country's flagging economy. Last week, the Bank of Japan
announced further easing steps which disappointed investors.    
    Canada's international trade data for June and employment
report for July are awaited on Friday. 
    A new 15-percent property transfer tax on foreign real
estate buyers in Vancouver will take effect today. 

 (Reporting by Fergal Smith; Editing by Bernadette Baum)