CANADA FX DEBT-C$ strengthens against weaker greenback before Yellen speech

Fri Aug 26, 2016 9:39am EDT
 
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* Canadian dollar at C$1.2881, or 77.63 U.S. cents
    * Bond prices slightly higher across the maturity curve

    TORONTO, Aug 26 (Reuters) - The Canadian dollar strengthened
against its U.S. counterpart on Friday as the greenback edged
lower ahead of a speech by Federal Reserve Chair Janet Yellen
that could map out a clearer path for U.S. interest rates.
    Losses for the U.S. dollar against a basket of major
currencies came as data showed U.S. economic growth was a bit
more sluggish than initially thought in the second quarter.
 
    Investors were wary of Yellen hinting at a near-term
interest rate hike when she speaks, which could divert some of
the liquidity that has underpinned riskier assets worldwide,
though others predicted she would strike a more equivocal note.
 
    Bank of Canada Governor Stephen Poloz is attending the
annual economic policy symposium in Jackson Hole at which Yellen
is speaking, but will not have a speaking role, a spokesperson
for the central bank said earlier this week.
    U.S. crude prices were unchanged at $47.33 a barrel.
Oil fell earlier in the day after the Saudi energy minister
watered down expectations that the world's largest producers
might agree next month to limit their output. 
    At 9:23 a.m. EDT (1323 GMT), the Canadian dollar 
was trading at C$1.2881 to the greenback, or 77.63 U.S. cents,
stronger than Thursday's close of C$1.2926, or 77.36 U.S.
    The currency's weakest level of the session was C$1.2922,
while it touched its strongest since Tuesday at C$1.2862.
    Canada will likely maintain its 2 percent inflation target
and bypass alternative policy goals when the central bank renews
its inflation-control agreement this year, strategists say, but
the main measure of core inflation may change. 
    Canadian government bond prices were slightly higher across
the maturity curve, with the two-year bond up 1.5
Canadian cents to yield 0.584 percent and the benchmark 10-year
 rising 9 Canadian cents to yield 1.056 percent.

 (Reporting by Fergal Smith; Editing by Meredith Mazzilli)