CANADA FX DEBT-C$ strengthens as oil prices turn higher
* Canadian dollar at C$1.3450, or 74.35 U.S. cents * Bond prices lower across steeper yield curve TORONTO, March 13 (Reuters) - The Canadian dollar edged higher on Monday against its U.S. counterpart as prices of oil reversed earlier losses, while investors braced for an expected U.S. interest rate hike this week. U.S. crude prices were up 0.04 percent at $48.51 a barrel. Oil had hit an earlier three-month low as rising U.S. inventories and drilling activity offset optimism over the Organization of the Petroleum Exporting Countries' efforts to restrict crude output. A Federal Reserve rate increase would be the second in four months, a pace unseen since the peak of the U.S. housing boom in 2006. It follows data on Friday which showed U.S. employers hired workers at a robust pace in February. But data on Friday also showed stronger-than-expected domestic jobs, which tempered expectations for policy divergence between the Bank of Canada and the Federal Reserve. At 9:40 a.m. ET (1340 GMT), the Canadian dollar was trading at C$1.3450 to the greenback, or 74.35 U.S. cents, slightly stronger than Friday's close of C$1.3463, or 74.28 U.S. cents. The range for the currency was C$1.3440 to C$1.3473. Speculators trimmed bullish bets on the Canadian dollar, data from the Commodity Futures Trading Commission and Reuters calculations showed on Friday. Canadian dollar net long positions dipped to 29,220 contracts as of March 7 from 30,090 a week earlier. Canadian government bond prices were lower across a steeper yield curve, with the two-year down 1.5 Canadian cents to yield 0.851 percent and the 10-year falling 31 Canadian cents to yield 1.85 percent. The gap between Canadian and U.S. 10-year yields narrowed by 2.4 basis points to a spread of -74.7 basis points. Canadian manufacturing sales data is due on Friday. Sales are expected to have decreased by 0.4 percent in January after rising for the previous two months. (Reporting by Fergal Smith; Editing by Chizu Nomiyama)
© Thomson Reuters 2017 All rights reserved.