November 7, 2016 / 9:37 PM / 4 years ago

CANADA FX DEBT-C$ gains as oil climbs, Clinton gets election boost

* Canadian dollar ends at C$1.3372, or 74.78 U.S. cents
    * Bond prices lower across the yield curve

 (Adds strategist comment, updates prices to close)
    By Alastair Sharp
    TORONTO, Nov 7 (Reuters) - The Canadian dollar gained
against a broadly stronger U.S. counterpart on Monday as oil
prices rose after U.S. Democratic presidential nominee Hillary
Clinton got a boost ahead of Tuesday's election.
    The FBI said on Sunday that Clinton would not face criminal
charges related to her use of a private e-mail server. A Clinton
victory is seen as less of a threat to Canada's trade-intensive
    "We've seen a bit of a pop in crude oil prices, which is
helping the Canadian dollar out a bit," said Shaun Osborne,
chief currency strategist at Scotiabank. "I think it's a little
bit of relief that maybe the election is not going to deliver
the shock that had been feared last week."
    U.S. Republican presidential candidate Donald Trump, who
opinion polls showed gaining on Clinton recently, has said he
would renegotiate or scrap the North American Free Trade
Agreement if he is elected.
    The Reuters/Ipsos States of the Nation project on Monday
showed Clinton will a 90 percent chance of defeating
    Oil rose, helped by a commitment from OPEC to stick to a
deal to cut output, but prices remained more than $7 below last
month's high due to persistent doubts over the feasibility of
the group's plan. U.S. crude prices settled up 1.9
percent at $44.89 a barrel. 
    Canada is a major oil exporter.
    The Canadian dollar settled at C$1.3372 to the
greenback, or 74.78 U.S. cents, stronger than Friday's close of
C$1.3403, or 74.61 U.S. cents.
    The currency's strongest level of the session was C$1.3300,
while its weakest was C$1.3416.
    On Friday, the loonie hit its weakest level since March at
    Against the Mexican peso, the Canadian dollar touched its
weakest level since Oct. 26, at 13.8646 pesos. 
    The peso strengthened on increased bets of a Clinton
victory. It had been losing strength in recent sessions as
opinion polls showed the race tightening.
    Mexico, along with the United States and Canada, is a member
    Speculators raised bearish bets on the Canadian dollar to
the most since March, Commodity Futures Trading Commission data
showed on Friday. Net short Canadian dollar positions rose to
15,960 contracts in the week ended Nov. 1 from 13,324 in the
prior week. 
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries as investors reduced
demand for safe-haven assets.
    The two-year bond fell 6 Canadian cents to yield
0.553 percent, and the benchmark 10-year declined 57
Canadian cents to yield 1.222 percent.

 (Additional reporting by Fergal Smith; Editing by W Simon and
Leslie Adler)
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