CANADA FX DEBT-C$ barely higher ahead of Bank of Canada update
(New throughout, updates prices and market activity to close, adds analyst comment) * Canadian dollar ends at C$1.3119, or 76.23 U.S. cents * Bond prices higher across the yield curve By Alastair Sharp TORONTO, Oct 18 (Reuters) - The Canadian dollar notched a marginal gain against its U.S. counterpart on Tuesday as oil prices rose and domestic manufacturing data reinforced a view that economic growth rebounded in the third quarter. The currency hit a nearly three-week intraday high before paring most of those gains, with investors turning their attention to the Bank of Canada, which is due to release its latest economic forecasts along with an interest rate decision on Wednesday. "The market is braced for downgrades to growth, and the main risk is that they don't come," said Adam Button, a currency analyst at ForexLive in Montreal, suggesting the currency could see further strength. "Growth has been resilient, oil prices are up, and government is spending," he said. "Those are three factors that are tough to fight." Manufacturing sales rose by 0.9 percent from July to hit C$51.12 billion, stronger than the 0.2 percent gain market analysts polled by Reuters had forecast. In volume terms, sales climbed by 1.2 percent. The Canadian dollar settled at C$1.3119 to the greenback, or 76.23 U.S. cents, stronger than Monday's close of C$1.3130, or 76.16 U.S. cents. The currency's weakest level of the session was C$1.3139, while it touched its strongest since Sept. 29 at C$1.3051. U.S. crude prices extended gains after the settlement as industry data showed a surprise draw in U.S. crude stockpiles. Rising commodity prices helped pull global stock markets higher. Canadian government bond prices were higher across the yield curve, with the two-year price up 2 Canadian cents to yield 0.592 percent and the benchmark 10-year rising 24 Canadian cents to yield 1.195 percent. EU governments failed to approve a free trade agreement with Canada on Tuesday, as continued opposition from French-speaking southern Belgium threatened the entire deal. (Additional reporting by Fergal Smith; Editing by Bill Trott)
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