CANADA FX DEBT-C$ strengthens to 1-week high as oil rallies, Brexit risk dips
(Adds analyst quote, updates prices) * Canadian dollar ends at C$1.2809, or 78.07 U.S. cents * Loonie touches strongest since June 13 at $1.2773 * Bond prices lower across steeper maturity curve By Fergal Smith TORONTO, June 20 (Reuters) - The Canadian dollar strengthened to a one-week high against its U.S. counterpart on Monday as improved risk appetite ahead of a British referendum on Thursday offset domestic economic data that indicated the second quarter began on weak footing. Global stocks rose and oil rallied after opinion polls swung in favor of Britain staying in the European Union, triggering support for Canada's risk-sensitive commodity-linked currency. "All eyes are going to be on the UK on Thursday and Friday," said Darren Richardson, senior corporate dealer, CanadianForex. The loonie may strengthen somewhat more if the "Remain" camp wins and risk appetite rises, but it will require oil to trade decisively above $50 a barrel for the currency to manage sharper gains, Richardson added. U.S. crude prices settled up $1.39 at $49.37 a barrel. The Canadian dollar closed at C$1.2809 to the greenback, or 78.07 U.S. cents, stronger than Friday's close of C$1.2878, or 77.65 U.S. cents. The currency's weakest level of the session was C$1.2878, while it touched its strongest since June 13 at $1.2773. The value of Canadian wholesale trade rose 0.1 percent in April, far less than expected. Volumes rose by 0.2 percent. Canadian government bond prices were lower across a steeper maturity curve in sympathy with Treasuries as investor appetite for safe-haven assets waned. The two-year price fell 11 Canadian cents to yield 0.578 percent and the benchmark 10-year dropped 82 Canadian cents to yield 1.206 percent. The 10-year yield touched its highest since June 8 at 1.212 percent. Last week it hit a four-month low at 1.052 percent. Domestic retail sales data is due on Wednesday. Retail sales are expected to have climbed by 0.9 percent in April after falling in March. (Reporting by Fergal Smith; Editing by Nick Zieminski and Meredith Mazzilli)
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