CANADA FX DEBT-Moderate gain in U.S. crude helps prop C$ after four-day retreat
(Adds fresh comment, closing figures, other details) * Canadian dollar at C$1.1636 or 85.94 U.S. cents * Bond prices higher across the maturity curve By Solarina Ho TORONTO, Dec 16 (Reuters) - The Canadian dollar gained some modest ground against its U.S. counterpart on Tuesday after four straight days of declines as U.S. oil prices finished a volatile session stronger and weak data out of China raised hopes the country's monetary policy will become more accommodative. Investors also booked some profit, while many also fled to safety early in the session after the Russian central bank raised interest rates 650 basis points to 17 percent in a failed attempt to halt a collapse in the rouble. Activity in China's factory sector contracted this month for the first time in seven months, the latest in a string of weak economic indicators that added to concerns about oil demand from the world's second-largest oil consumer. "The (data) renewed stimulus hopes that we get some more monetary policy accommodation from China, which then we'd see a pickup in export demand from China, which would be a benefit to the Australian and Canadian dollars," said Scott Smith, senior market analyst at Cambridge Mercantile Group in Calgary, adding it was difficult to know whether oil prices could fall further. "Technically speaking we could be close to finding a bottom, but from a fundamental perspective, there's not a good narrative at this point to really suggest we have seen a bottom in oil." The Canadian dollar finished at 1.1636 to the greenback, or 85.94 U.S. cents, slightly stronger than Monday's close of C$1.1656, or 85.79 U.S. cents. Earlier, it traded near levels not seen since July 10, 2009. "What you're seeing is a classic risk-off scenario ... Right now, we're brushing up against technical resistance levels, so there has been some measure of profit taking," said Bipan Rai, director of foreign exchange strategy at CIBC World Markets. In Canada, data showed that factory sales fell by a more-than-expected 0.6 percent in October from September. Foreign investment in Canadian securities strengthened to C$9.53 billion from C$4.64 billion between October and September. All eyes will turn to the U.S. Federal Reserve on Wednesday, when the Federal Open Market Committee meeting concludes. Market participants are keen to see when the central bank will consider moving away from its near zero interest rate policy. Canadian government bond prices were higher across the maturity curve, with the two-year up 4.5 Canadian cents to yield 0.954 percent and the benchmark 10-year rising 33 Canadian cents to yield 1.748 percent. (Reporting by Solarina Ho; editing by James Dalgleish and Matthew Lewis)
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