April 11, 2017 / 9:09 PM / 5 months ago

CANADA FX DEBT-C$ unchanged as risk aversion offsets oil rally

 (Adds analyst comments and updates prices)
    * Canadian dollar ends at C$1.3332, or 75.01 U.S. cents
    * Loonie touches its strongest since April 3 at C$1.3311
    * Bond prices end higher across a flatter yield curve

    By Fergal Smith
    TORONTO, April 11 (Reuters) - The Canadian dollar closed
unchanged against the greenback on Tuesday, failing to lock in a
fresh one-week high as risk aversion offset higher oil prices in
rangebound trading ahead of a Bank of Canada interest rate
decision.
    U.S. stocks ended lower as fresh concerns about the French
presidential election and possible U.S. military action against
Syria and North Korea spurred demand for safe-haven assets such
as gold, Treasuries and the yen.                 
    Prices of oil, one of Canada's major exports, rose on
reports that Saudi Arabia has told Organization of the Petroleum
Exporting Countries' officials it wants to continue output cuts
for an additional six months.
    U.S. crude oil futures settled up 32 cents at $53.40 a
barrel.    
    Higher oil prices offset lower stock prices to leave
Canada's risk-sensitive currency "fairly steady" against the
U.S. dollar, said Marc Chandler, global head of currency
strategy, at Brown Brothers Harriman.
    The Bank of Canada is widely expected to hold rates at 0.50
percent when it releases its interest rate decision and Monetary
Policy Report on Wednesday.
    Still, the strength of recent domestic data has pointed to a
pickup in Canada's economy and economists expect the central
bank could raise its first-quarter growth forecast.
    "I think that generally people are looking for less
pessimistic comments from the governor," Chandler said.    
    The Canadian dollar          ended at C$1.3332 to the
greenback, or 75.01 U.S. cents, unchanged from Monday's close.
    The currency's weakest level of the session was C$1.3357,
while it touched its strongest since April 3 at C$1.3311.
    Canadian government bond prices were higher across a flatter
yield curve in sympathy with U.S. Treasuries. The two-year
           price rose 6 Canadian cents to yield 0.729 percent
and the 10-year             climbed 44 Canadian cents to yield
1.547 percent.
    On Friday, the 10-year yield hit a more than four-month low
at 1.505 percent.
    Canada is one of four top-rated countries exposed to a
potential housing market correction, Moody's said.             

 (Reporting by Fergal Smith; Editing by Frances Kerry and Tom
Brown)
  
 

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