November 30, 2016 / 9:42 PM / in a year

CANADA FX DEBT-C$ edges higher against firmer greenback as oil surges

(Adds analyst comments and details on Trans Mountain pipeline
and updates prices)
    * Canadian dollar ends at C$1.3429, or 74.47 U.S. cents
    * Loonie touches strongest since Nov. 9 at C$1.3357
    * Bond prices lower across a steeper yield curve

    By Fergal Smith
    TORONTO, Nov 30 (Reuters) - The Canadian dollar edged higher
against its firmer U.S. counterpart on Wednesday as oil prices
jumped on a deal by major producers to cut output and data
showed the domestic economy grew at the fastest pace in more
than two years.
     Canada's economy grew in the third quarter at an annualized
3.5 percent pace as it benefited from a rebound in oil exports,
while stronger-than-expected growth for September suggested the
fourth quarter could slow less than anticipated. 
    "It's going to reduce the prospect of any near-term easing
by the Bank of Canada," said Paul Ferley, assistant chief
economist at Royal Bank of Canada.
    Meanwhile, the U.S. dollar rallied against a basket
of major currencies as strong private payrolls data bolstered
expectations for a hawkish Federal Reserve next year.
    The Canadian dollar performed better than most other G10
currencies because it is tied to the movement in oil prices,
said Eric Viloria, currency strategist at Wells Fargo.        
    U.S. crude prices settled more than 9 percent higher
at $49.44 a barrel as the Organization of the Petroleum
Exporting Countries agreed to curb production for the first time
since 2008 in a bid to support prices. 
    Oil is one of Canada's major exports.
    The Canadian dollar ended at C$1.3429 to the
greenback, or 74.47 U.S. cents, slightly stronger than Tuesday's
close of C$1.3437, or 74.42 U.S. cents.
    The currency's weakest level of the session was C$1.3462,
while it touched its strongest since Nov. 9 at C$1.3357.
    For the month, the loonie dipped 0.1 percent.
    The Canadian government is close to meeting conditions
British Columbia has laid out for provincial support of Kinder
Morgan Inc's proposal to expand its Trans Mountain
pipeline, the province's premier Christy Clark said.
 
    Approval by Canada on Tuesday of the plan to expand the
pipeline was seen by some market players as supportive of the
Canadian dollar. The C$6.8 billion project would nearly triple
capacity on the artery to 890,000 barrels a day. 
    Canadian government bond prices were lower across a steeper
yield curve in sympathy with U.S. Treasuries. The two-year
 price fell 5 Canadian cents to yield 0.700 percent
and the benchmark 10-year declined 64 Canadian cents
to yield 1.583 percent.
    Last week, the 10-year yield touched its highest since
December at 1.614 percent as investors bet that the United
States will pursue policies that boost inflation.

 (Reporting by Fergal Smith; Editing by Meredith Mazzilli and
Jonathan Oatis)

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