CANADA FX DEBT-C$ strengthens against broadly weaker greenback

Mon May 2, 2016 10:11am EDT
 
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* Canadian dollar at C$1.2531, or 79.80 U.S. cents
    * Bond prices lower across the maturity curve

    TORONTO, May 2 (Reuters) - The Canadian dollar strengthened
slightly against a broadly weaker U.S. counterpart on Monday,
edging toward a nearly 10-month high reached last week.
    The loonie, as Canada's dollar is commonly known, has
rallied 17 percent from a 12-year low in January of C$1.4689,
helped by rebounding oil prices, fiscal stimulus and
stronger-than-expected domestic economic activity.
    Growth picked up in the Canadian manufacturing sector in
April for the second month in a row as businesses increased
their production volumes in response to stronger demand.
     
    The greenback fell against a basket of major
currencies as solid German manufacturing data helped push the
euro higher. 
    Oil prices edged back from 2016 highs on Monday as rising
production in the Middle East outweighed a decline in U.S.
output and a sliding dollar. U.S. crude was down 1.39
percent at $45.28 a barrel. 
    At 9:45 a.m. EDT (1345 GMT), the Canadian dollar 
was trading at C$1.2531 to the greenback, or 79.80 U.S. cents,
slightly stronger than Friday's close of C$1.2548, or 79.69 U.S.
cents.
    The currency's strongest level of the session was C$1.2514,
while its weakest was C$1.2559.
    On Friday, the loonie touched C$1.2497, its strongest since
July 1.
    Speculators have increased bullish bets on the loonie,
Commodity Futures Trading Commission data showed on Friday. Net
long Canadian dollar positions rose to 11,999 contracts in the
week ended on Tuesday from 7,308 in the prior week. 
    Canadian government bond prices were lower across the
maturity curve in sympathy with U.S. Treasuries. The two-year
 price fell 3 Canadian cents to yield 0.708 percent,
its highest since June 23, while the benchmark 10-year
 fell 11 Canadian cents to yield 1.526 percent.
    Bank of Canada Governor Stephen Poloz will participate on
Tuesday in a panel entitled "Monetary Policy: Out of
Ammunition?" at the Milken Institute in Los Angeles.
    Canada's trade report for March is awaited on Wednesday,
while the nation's April employment report is due on Friday.
 

 (Reporting by Fergal Smith; Editing by Lisa Von Ahn)