CANADA FX DEBT-C$ steadies as market braces for Bank of Canada decision
* Canadian dollar at C$1.3281, or 75.30 U.S. cents * Bond prices higher across the yield curve TORONTO, Dec 7 (Reuters) - The Canadian dollar was little changed against its U.S. counterpart on Wednesday, trading in a narrow range as oil fell and the market braced for the Bank of Canada's interest rate decision. The central bank is widely expected to hold interest rates at 0.50 percent, with the focus on the policy statement for any mention of how Donald Trump's U.S. presidential election victory could affect the Canadian and U.S. economies. The loonie reached a more than six-week peak against the greenback on Monday at C$1.3236, helped by recent stronger-than-expected economic data and an output cut agreement by members of the Organization of the Petroleum Exporting Countries. But data on Tuesday showed a disappointing drop in export volumes and oil, one of Canada's major exports, has pared some gains since the OPEC deal. U.S. crude prices were down 1.18 percent at $50.33 a barrel on doubts production cuts would be deep enough to end a supply overhang that has weighed on markets for more than two years. At 8:54 a.m. EDT (1354 GMT), the Canadian dollar was trading at C$1.3281 to the greenback, or 75.30 U.S. cents, slightly stronger than Tuesday's close of C$1.3284, or 75.28 U.S. cents. The currency's strongest level of the session was C$1.3263, while its weakest was C$1.3292. Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries and German government bonds amid expectations the European Central Bank will extend its bond-buying stimulus scheme this week. The two-year rose 3 Canadian cents to yield 0.708 percent and the benchmark 10-year climbed 15 Canadian cents to yield 1.617 percent. On Thursday, the 10-year yield touched its highest in more than one year at 1.712 percent as investors bet that the policies of Trump will trigger higher inflation. (Reporting by Fergal Smith; Editing by Bill Trott)
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