CANADA FX DEBT-C$ firms by a cent as higher crude prices, factory sales lift
(Adds closing prices and analyst comment) * Canadian dollar at C$1.1277 or 88.68 U.S. cents * Bond prices mixed across the maturity curve By Leah Schnurr and Solarina Ho OTTAWA, Nov 14 (Reuters) - The Canadian dollar strengthened a cent against its U.S. counterpart on Friday, buoyed by stronger oil prices and data that showed domestic factory sales rose more than expected in September. Canadian manufacturing sales, which rose 2.1 percent, helped put a floor under the Canadian dollar. U.S. crude futures climbed on expectations of higher demand for heating oil following forecasts of a cold weekend in parts of the United States. The higher prices helped the commodities-linked loonie rebound the day after a drop in crude knocked the currency weaker. "With oil prices moving the way they are, it's no surprise the Canadian dollar had a positive day," said Lennon Sweeting, a Currency Strategist with USForex. "And manufacturing shipments today, albeit second tier data, was very positive and was a big improvement from last month's release and definitely well ahead of what expectations were for this month." The Canadian dollar closed at C$1.1277 to the greenback, or 88.68 U.S. cents, firmly stronger than Thursday's close of C$1.1376, or 87.90 U.S. cents. The Canadian dollar, which experienced whip-saw trading in recent sessions, was less than 0.4 percent stronger for the week. While analysts expect the Canadian dollar is likely to consolidate around current levels in the short-term, most see more weakness down the line for the loonie. "I think we're rangebound for the U.S. dollar-Canadian dollar for now and the next move is really going to have to come from a major data point," said Mazen Issa, senior Canada macro strategist at TD Securities in Toronto. Issa sees next week's inflation data or third-quarter gross domestic product at the end of the month as potential catalysts, while more signs of strength in the U.S. economy could also lift the greenback to the detriment of the loonie. "The bias, for now, is you could still see a higher U.S. dollar-Canadian dollar, but I would admit that the rally in U.S. dollar-Canadian dollar has looked a little tired recently, maybe a bit overbought," he said. Canadian government bond prices were mixed across the maturity curve, with the two-year down 1.5 Canadian cents to yield 1.013 percent and the benchmark 10-year up 6 Canadian cents to yield 2.037 percent. (Editing by Nick Zieminski and Grant McCool)
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