CANADA FX DEBT-C$ strengthens to a 7-week high as oil climbs
* Canadian dollar at C$1.3220, or 75.64 U.S. cents * Loonie touches its strongest since Oct. 20 at C$1.3199 * Bond prices lower across steeper maturity curve TORONTO, Dec 8 (Reuters) - The Canadian dollar strengthened to a seven-week high against its U.S. counterpart on Thursday as oil rose, although some gains for the loonie were pared as currency markets gyrated after the European Central Bank's monetary policy decisions. The price of oil, one of Canada's major exports, recovered above $50 a barrel, bouncing back from the week's lows. U.S. crude prices were up 1.17 percent at $50.35 a barrel. The U.S. dollar rose against a basket of major currencies as the ECB announced it would trim asset buys from April next year, but also broaden the maturity range for eligible securities and permit purchases of bonds yielding below the ECB's deposit rate. At 9:39 a.m. EDT (1439 GMT), the Canadian dollar was trading at C$1.3220 to the greenback, or 75.64 U.S. cents, stronger than Wednesday's close of C$1.3237, or 75.55 U.S. cents. The currency's weakest level of the session was C$1.3251, while it touched its strongest since Oct. 20 at C$1.3199. Recent stronger-than-expected economic data and higher oil prices after last week's output cut agreement by members of the Organization of the Petroleum Exporting Countries have helped support the Canadian dollar. On Wednesday, the Bank of Canada pointed to a "significant" amount of slack in the Canadian economy as it held interest rates steady, but also used language suggesting a rate cut is off the table as global growth picks up. Canadian government bond prices were lower across a steeper yield curve in sympathy with U.S. Treasuries and German government bonds. The two-year price fell 3 Canadian cents to yield 0.719 percent and the benchmark 10-year declined 39 Canadian cents to yield 1.64 percent. (Reporting by Fergal Smith; Editing by Bill Trott)
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