CANADA FX DEBT-C$ gains as oil rises, U.S. dollar slips further
* Canadian dollar at C$1.2499 or 80.01 U.S. cents * Bond prices mixed across the maturity curve By Alastair Sharp TORONTO, March 23 (Reuters) - The Canadian dollar gained against its U.S. counterpart on Monday, boosted by a rise in the price of oil, as traders weighed the possibility that the Federal Reserve will wait for longer before raising U.S. interest rates. Oil, a major Canadian export, firmed despite pressure from a global supply glut as the U.S. dollar extended last week's steepest weekly decline in 3-1/2 years. The greenback has struggled since a Fed statement last week that signaled a slower approach to raising rates than some investors had expected. "What the Fed has done is created a lot more sensitivity to upcoming economic news," said Rahim Madhavji, president of KnightsbridgeFX.com. "In Canada, oil is the canary in the coalmine. Everyone's got to look at oil prices to really figure out what's going to happen to the economy and possibly how will the Bank of Canada react," Madhavji said. The Canadian dollar ended the North American session changing hands at C$1.2499 against the U.S. dollar, or 80.01 U.S. cents, stronger than Friday's North American session close of C$1.2579, or 79.50 U.S. cents. The dollar resumed its fall on Monday as St. Louis Fed President James Bullard told CNBC that the dollar index, which measures the greenback against a basket of major currencies, was not far from fair value. He also said it was unclear how much more the dollar would strengthen against the euro. Camilla Sutton, chief currency strategist at Scotiabank, said the U.S. dollar selloff could push the Canadian currency to near the 50-day average at C$1.2476, with last week's low at C$1.2450 the next resistance level. Canadian government bond prices saw subdued action across the maturity curve, with the two-year up half a Canadian cent to yield 0.455 percent and the benchmark 10-year slipping 4 Canadian cents to yield 1.308 percent. (Additional reporting by Andrea Hopkins; Editing by Peter Galloway and James Dalgleish)
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