CANADA FX DEBT-C$ strengthens to 1-week high as oil and stocks rally

Thu Jul 14, 2016 9:57am EDT
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* Canadian dollar at C$1.2932, or 77.33 U.S. cents
    * Loonie touches its strongest since July 7 at C$1.2908
    * Bond prices lower across the maturity curve

    TORONTO, July 14 (Reuters) - The Canadian dollar
strengthened to a one-week high against its U.S. counterpart on
Thursday as higher oil and stock prices supported the
risk-sensitive commodity-linked currency.
    Gains for the loonie come one day after the Bank of Canada
stayed optimistic about the economic outlook even as it cut its
growth forecasts. 
    Oil prices recovered from sharp losses the previous day, but
brokers said the downtrend could resume soon as record-high
stocks and worries over slowing economic growth dampened
sentiment. U.S. crude prices were up 1.12 percent to
$45.25 a barrel. 
     U.S. stocks rose after a major bank reported second-quarter
profit that beat estimates and as the Bank of England
unexpectedly kept interest rates unchanged but signaled it was
likely to deliver stimulus in August.  
    At 9:43 a.m. EDT (1343 GMT), the Canadian dollar 
was trading at C$1.2932 to the greenback, or 77.33 U.S. cents,
stronger than Wednesday's close of C$1.2986, or 77.01 U.S.
    The currency's weakest level of the session was C$1.2987,
while it touched its strongest since July 7 at C$1.2908.
    New home prices in Canada rose by a higher-than-forecast 0.7
percent in May from April, mainly on higher prices in Vancouver
and the Toronto region, data from Statistics Canada showed.
    Canadian government bond prices were lower across the
maturity curve as improved risk appetite reduced the appeal of
safe-haven assets.
    The two-year price fell 7.5 Canadian cents to
yield 0.532 percent and the benchmark 10-year 
dropped 43 Canadian cents to yield 1.049 percent.
    On Monday, the 10-year yield hit a 5-month low at 0.935

 (Reporting by Fergal Smith; Editing by Nick Zieminski)