CANADA FX DEBT-C$ extends gains as oil, global equities rally
* Canadian dollar at C$1.3253, or 75.45 U.S. cents * Bond prices mostly higher across the maturity curve TORONTO, Aug 27 (Reuters) - The Canadian dollar firmed against its U.S. counterpart on Thursday, as crude prices surged following a global equities rally and an unexpected drop in U.S. oil inventories. The loonie, which fell to 11-year lows earlier this week as investors rushed to safety on worries about slowing growth in China, also was stronger against other major currencies. The strength came even as the greenback rose following upbeat U.S. data that showed the economy grew faster than initially thought during the second quarter. The data was reassuring to investors and central bank officials preoccupied by worries over China's impact on the global economy. * At 9:40 a.m. EDT (1340 GMT), the Canadian dollar was trading at C$1.3253 to the U.S. dollar, or 75.45 U.S. cents, extending Wednesday's gains. The Bank of Canada's official close on Wednesday was C$1.3315, or 75.10 U.S. cents. * Canada's currency has swung broadly so far in the session, trading between C$1.3186 and C$1.3305. * U.S. gross domestic product expanded at a 3.7 percent annual pace in the second quarter instead of the 2.3 percent rate reported last month, the Commerce Department said in its second GDP estimate. * Other data also painted a healthy employment picture in the United States, with initial claims for state unemployment benefits slipping 6,000 to a seasonally adjusted 271,000 last week. * U.S. crude prices were up 3.89 percent to $40.10 a barrel, while Brent crude added 3.92 percent to $44.83. Oil prices were supported by data on Wednesday showing U.S. crude inventories fell 5.5 million barrels in the week to Aug. 21, the biggest one-week decline since early June. * The Canadian dollar is expected to trade between C$1.3145 and C$1.3280 against the U.S. dollar on Thursday, according to National Bank Financial. * Canadian government bond prices were mostly higher across the maturity curve, with the two-year price down 3.5 Canadian cents to yield 0.407 percent and the benchmark 10-year falling 13 Canadian cents to yield 1.455 percent. * The Canada-U.S. two-year bond spread widened to -29.7 basis points, while the 10-year spread widened to -74.0 basis points. (Reporting by Solarina Ho; Editing by Paul Simao)
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