CANADA FX DEBT-Canada dollar steady despite oil-price jump
* Canadian dollar at C$1.0861, or 92.07 U.S. cents * Rising oil prices fail to boost currency * Bond prices mixed By Andrea Hopkins TORONTO, June 13 (Reuters) - The Canadian dollar was little changed against the U.S. dollar on Friday despite a rise in oil prices as increasing violence in Iraq spurred a flight to safety, while hawkish comments by the Bank of England pushed sterling higher. Oil prices surged, with Brent crude slicing through $114 a barrel at one point to a nine-month high and U.S. crude touching as high as $107.68. Both benchmarks looked set to gain almost 5 percent this week, the biggest weekly rise since July 2013. While there have been no disruptions to oil supplies so far, a move by Sunni Islamist militants towards Baghdad has made investors nervous. Higher oil prices often push up the resource-linked Canadian dollar but the impact on the currency on Friday was limited. "It's been a quiet overnight session, just 11 points, which is a bit surprising given what we're seeing in oil markets. The correlation between oil prices and geopolitical risk is not carrying through to the Canadian dollar," said Ken Wills, currency strategist and broker at CanadianForex in Toronto. "We may see a bit more carry-through if there is an international response (in Iraq)." At 9:41 a.m. (1341 GMT), the Canadian dollar was at C$1.0861 against the U.S. dollar, or 92.07 U.S. cents, little changed from Thursday's close of C$1.0855 against the greenback, or 92.12 U.S. cents. Wills said he expected the Canadian currency to remain in a tight range in quiet trade on Friday but said the loonie could benefit if upward pressure on oil prices persists. He said the Canadian dollar showed no reaction to the election of a majority Liberal government in Ontario, Canada's most populous province, on Thursday. Sterling surged on Friday after Bank of England Governor Mark Carney said late on Thursday that British interest rates could rise sooner than financial markets had expected, in a surprisingly stark warning that monetary policy may start to tighten before the end of this year. That's a contrast to the Bank of Canada, whose governor, Stephen Poloz, said on Thursday that inflation pressures in Canada remained low. The dovish tone has prevented the loonie gaining much ground against the greenback. Canadian government bond prices were mixed across the maturity curve, higher on the short end and lower on the long. The two-year was down 4.5 Canadian cents to yield 1.103 percent and the benchmark 10-year bond was down 20 Canadian cents to yield 2.339 percent. (Reporting by Andrea Hopkins; Editing by Peter Galloway)
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