CANADA FX DEBT-C$ rebounds with crude as risk sentiment strengthens
* Canadian dollar at C$1.2505 or 79.97 U.S. cents * Bond prices rise across the maturity curve By Solarina Ho TORONTO, Feb 12 (Reuters) - The Canadian dollar was stronger against a globally weaker greenback on Thursday as crude prices rose and the market grew a bit more confident about taking risk following a ceasefire deal in the Russia-Ukraine conflict. Prices for oil, a major Canadian export, rebounded as industry spending cuts and a softer greenback offset jitters about record supply levels. The U.S. dollar weakened broadly following a media report that the Bank of Japan saw further monetary stimulus as counter-productive. As a backdrop, Germany, France, Russia and Ukraine agreed on a deal on Thursday that offers a "glimmer of hope" for an end to fighting in eastern Ukraine after marathon overnight talks. . "Energy in general is still obviously a key factor here when it comes to the loonie ... There's a real spectrum of factors that net-net are, from global economic perspective, somewhat bullish," said Brad Schruder, director of foreign exchange at BMO Capital Markets. "This retracement from yesterday when we almost broke C$1.27, is probably more flow related than it was any fundamental shift." At 9:32 a.m. EST (1432 GMT), the Canadian dollar was at C$1.2505 to the U.S. dollar, or 79.97 U.S. cents, firmer than Wednesday's close of C$1.2641, or 79.11 U.S. cents. Schruder said any strength in the Canadian dollar will be short-lived, noting that the Bank of Canada's comments earlier this week that the Canadian economy was operating below potential continue to weigh. "(The comments) still cast a very ominous pall over the view for the Canadian dollar ... It's hard to get really excited about a currency when the central bank is giving signs they're fine with the currency weakening," he said. Canadian government bond prices were higher across the maturity curve, with the two-year up 3.5 Canadian cents to yield 0.418 percent, and the benchmark 10-year climbing 19 Canadian cents to yield 1.431 percent. (Reporting by Solarina Ho; Editing by Chizu Nomiyama; and Peter Galloway)
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