CANADA FX DEBT-C$ strengthens as greenback pares some recent gains

Thu Oct 13, 2016 9:37am EDT
 
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* Canadian dollar at C$1.3240, or 75.53 U.S. cents
    * Loonie touches its weakest since Friday at C$1.3307
    * Bond prices higher across the maturity curve

    TORONTO, Oct 13 (Reuters) - The Canadian dollar edged higher
against its U.S. counterpart on Thursday as the greenback pared
some recent gains and oil firmed.
    The U.S. dollar dipped against a basket of major
currencies, but posted a 7-month high intraday after minutes on
Wednesday from the last U.S. Federal Reserve meeting left a
December interest rate hike in play.
    Gains for the commodity-linked loonie were restrained as a
sharp decline in China's exports revived concerns about the
health of the world's second-biggest economy and weighed on
global stock markets. 
    U.S. crude prices were up 0.18 percent to $50.27 a
barrel, gaining support from record Chinese imports.
    At 9:18 a.m. EDT (1318 GMT), the Canadian dollar 
was trading at C$1.3240 to the greenback, or 75.53 U.S. cents,
stronger than Wednesday's close of C$1.3259, or 75.42 U.S.
cents.
    The currency's strongest level of the session was C$1.3238,
while it touched its weakest since Friday at C$1.3307, just shy
of the more-than six-month low set on Friday at C$1.3315. 
    New home prices in Canada rose 0.2 percent in August,
following a 0.4 percent monthly increase in July, Statistics
Canada said. It left the index up 2.7 percent from a year
earlier. 
    Separately, the Teranet-National Bank Composite House Price
Index showed national home prices rose 0.8 percent last month
from August. Prices were up 11.7 percent from a year earlier.
 
    Canadian government bond prices were higher across the yield
 curve in sympathy with Treasuries as the disappointing Chinese
data spurred risk aversion. The two-year rose 1.7
Canadian cents to yield 0.594 percent and the benchmark 10-year
 climbed 10 Canadian cents to yield 1.186 percent.
    The 10-year spread versus Treasuries narrowed 1.9 basis
points to -56.2 basis points as Treasuries outperformed.
    Germany's Constitutional Court cleared the government to
approve a trade accord between the European Union and Canada
under defined conditions, boosting the agreement's chances of
passing an EU vote next week. 

 (Reporting by Fergal Smith; Editing by Nick Zieminski)