CANADA FX DEBT-C$ pulls back from 2-week high as oil falls

Mon Oct 17, 2016 10:14am EDT
 
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* Canadian dollar at C$1.3136, or 76.13 U.S. cents
    * Bond prices higher across the yield curve
    * 10-year yield touches its highest since June 23 at 1.300
pct

    TORONTO, Oct 17 (Reuters) - The Canadian dollar edged higher
against its U.S. counterpart on Monday, but the loonie pulled
back from an earlier two-week high as oil fell and investor
attention turned to the Bank of Canada interest rate decision
mid-week.
    U.S. crude prices were down 1.59 percent to $49.55 a
barrel as a rising rig count in the United States stoked worries
of increased output. 
    Modest gains for the loonie came as foreign investment in
Canadian securities in August rose to C$12.74 billion from
C$9.10 billion in July. For the January to August period,
foreign purchases of Canadian securities reached a record
C$108.14 billion. 
    The Bank of Canada is expected to hold interest rates at
0.50 percent on Wednesday as it waits to see how the economic
bounce-back it is anticipating in the second half of the year
unfolds.
    At 10:02 a.m. EDT (1402 GMT), the Canadian dollar 
was trading at C$1.3136 to the greenback, or 76.13 U.S. cents,
slightly stronger than Friday's close of C$1.3145, or 76.07 U.S.
cents.
    The currency's weakest level of the session was C$1.3183,
while it touched its strongest since Sept. 29 at C$1.3065.
    Speculators cut bearish bets on the Canadian dollar,
Commodity Futures Trading Commission data showed on Friday. Net
short Canadian dollar positions dipped to 11,704 contracts in
the week ended Oct. 11 from 14,077 in the prior week.
 
    Canadian government bond prices were higher across the yield
curve, with the two-year price up 3 Canadian cents to
yield 0.606 percent and the benchmark 10-year rising
22 Canadian cents to yield 1.225 percent.
    The 10-year yield touched its highest intraday since June 23
at 1.300 percent.
    Canadian manufacturing workers at Fiat Chrysler Automobiles
voted on Sunday to approve a tentative labor agreement with the
automaker, their union said, averting a strike and clearing the
way for talks with Ford Motor Co.    

 (Reporting by Fergal Smith; Editing by Nick Zieminski)