CANADA FX DEBT-C$ strengthens as oil rebounds, stocks climb

Mon Sep 19, 2016 10:06am EDT
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* Canadian dollar at C$1.3165, or 75.96 U.S. cents
    * Bond prices mixed across the yield curve

    TORONTO, Sept 19 (Reuters) - The Canadian dollar on Monday
bounced back from a seven-week low in the previous session as
oil prices rebounded and global equity markets climbed.    
    Gains for the loonie follow a 1.3 percent decline last week
when lower crude prices weighed on commodity-linked currencies,
also weakened by concern that leading central banks may not
expand monetary stimulus.
    On Monday, oil prices rose from multi-week lows after
Venezuela said OPEC and non-OPEC producers were close to a deal
to stabilize the crude market and as clashes in Libya disrupted
attempts to boost crude exports. U.S. crude prices were
up 0.74 percent to $43.35 a barrel. 
    The U.S. dollar fell from a two-week high as
investors braced for central bank policy decisions in Japan and
the United States on Wednesday.
    At 9:20 a.m. EDT (1320 GMT), the Canadian dollar 
was trading at C$1.3165 to the greenback, or 75.96 U.S. cents,
stronger than Friday's close of C$1.3214, or 75.68 U.S. cents.
    The currency's strongest level of the session was C$1.3135,
while its weakest was C$1.3230.    
    Mexico's peso weakened slightly on Monday from a
record low close on Friday, within sight of the 20 pesos per
U.S. dollar psychological level.
    The peso's plunge is seen putting further pressure on
Canadian exporters to the U.S. market, because it could make
Mexico's goods more competitively priced in U.S. dollars than
those from Canada. 
    Speculators pared bullish bets on the Canadian dollar for
the second straight week, Commodity Futures Trading Commission
data showed on Friday. 
    Canada's autoworkers' union Unifor and General Motors Co
 made little progress resolving the key issue of new
investment in contract talks late on Sunday, the union's
president said, just over 24 hours ahead of a strike deadline."
    Canadian government bond prices were mixed across the yield
curve, with the two-year bond flat to yield 0.581
percent and the benchmark 10-year falling 7 Canadian
cents to yield 1.197 percent.
    Bank of Canada Governor Stephen Poloz will give a speech in
Quebec City on Tuesday on the topic of "Living With Lower for
Longer", followed by a press conference. Investors will be
looking to see whether Poloz emphasizes the downbeat tone of the
recent policy statement.
    Canadian inflation and retail sales data are due on Friday.
The annual inflation rate is forecast to have edged up to 1.4
percent in August, while investors will be looking for signs
that the federal government's new child benefit checks gave a
boost to retail sales. 

 (Reporting by Fergal Smith Editing by W Simon)