CANADA FX DEBT-C$ strengthens to nearly 1-week high, buoyed by OPEC deal

Thu Sep 29, 2016 9:38am EDT
 
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* Canadian dollar at C$1.3082, or 76.44 U.S. cents
    * Loonie touches its strongest since Friday at C$1.3048
    * Bond prices mixed
    * 10-year Canada-U.S. spread hits its widest in six months

    TORONTO, Sept 29 (Reuters) - The Canadian dollar
strengthened to a nearly one-week high against its U.S.
counterpart on Thursday, buoyed by a deal by major oil producers
to limit output.
    Gains for the loonie followed a 0.7 percent advance on
Wednesday, its biggest in nearly four weeks, after the
Organization of the Petroleum Exporting Countries agreed to
limit crude output at its policy meeting in November.
    Oil prices stabilized as investors questioned whether the
agreement to curb production would be enough to rebalance a
heavily oversupplied market. U.S. crude prices were up
0.32 percent at $47.20 a barrel. 
    At 9:16 a.m. EDT (1316 GMT), the Canadian dollar 
was trading at C$1.3082 to the greenback, or 76.44 U.S. cents,
stronger than Wednesday's close of C$1.3109, or 76.28 U.S.
cents.
    The currency's weakest level of the session was C$1.3116,
while it touched its strongest since Friday at C$1.3048.
    On Tuesday, the loonie hit its weakest in nearly six months
at C$1.3281, pressured by recent disappointing domestic economic
data and a more dovish tone from the Bank of Canada.
    Canadian government bond prices were mixed across the yield
curve, with the two-year down 0.5 Canadian cent to
yield 0.516 percent and the benchmark 10-year rising
6 Canadian cents to yield 0.975 percent.
    The 10-year yield fell 3.3 basis points further below its
U.S. counterpart as the rate of growth for the U.S. economy was
revised higher for the second quarter. That left the spread at
-61.9 basis points, its widest since March 29.
    Domestic gross domestic product data for July is due on
Friday. The economy is expected to have grown by 0.3 percent,
which would reinforce expectations that it rebounded in the
third quarter after contracting in the second.        

 (Reporting by Fergal Smith; Editing by Meredith Mazzilli)