February 23, 2017 / 10:20 PM / 3 years ago

CANADA FX DEBT-C$ gains as oil prices climb, greenback dips

 (Adds broker comment, updates prices to close)
    * Canadian dollar settles at C$1.3114, or 76.25 U.S. cents
    * Loonie touches its strongest since Monday at C$1.3083
    * Bond prices move higher

    By Alastair Sharp
    TORONTO, Feb 23 (Reuters) - The Canadian dollar gained
against its U.S. counterpart on Thursday, helped by stronger oil
prices and a broader pullback for the greenback on a perceived
lack of progress on U.S. tax reform a day after the release of
Federal Reserve minutes seen as dovish.
    Gains for the loonie came as U.S. Treasury Secretary Steven
Mnuchin said he does not see any changes to the North American
Free Trade Agreement in the short term and that he wanted to see
tax reform passed before an August recess.
    Canada sends 75 percent of its exports to the United States
and could suffer badly if U.S. President Donald Trump follows
through on promises to renegotiate NAFTA.
    "We're in consolidation mode right now, waiting for either
more policy announcements out of Trump, waiting for more central
bank announcements," said Blake Jespersen, a managing director
for foreign exchange sales at BMO Capital Markets.
    "The Canadian dollar did a bit better on the back of
stronger oil" after failing to push much beyond C$1.32 in the
prior session, he said.
    "It was a combination of large flows up there and oil turned
around and momentum went back the other way," he added.
    The Canadian dollar          settled at C$1.3114 to the
greenback, or 76.25 U.S. cents, stronger than Wednesday's close
of C$1.3144, or 76.08 U.S. cents.
    The currency's weakest level of the session was C$1.3169,
while it touched its strongest since Monday at C$1.3083.
    Benchmark Brent crude oil         rose 74 cents a barrel to
settle at $56.58 after touching a high of $57.26. U.S. light
crude        settled up 86 cents at $54.45 after touching
    In an interview with Reuters, Trump spoke favorably about a
potentially export-boosting border adjustment tax being pushed
by Republicans in the U.S. Congress, but did not specifically
endorse it.             
    Canadian average weekly earnings of nonfarm payroll
employees rose 1.0 percent in December, while the number of
nonfarm payroll employees increased by 39,200 for the same
month, data from Statistics Canada showed.
    Canadian government bonds prices moved higher in sympathy
with U.S. Treasuries, with the two-year            price up 3
Canadian cents to yield 0.767 percent and the 10-year
            rising 40 Canadian cents to yield 1.668 percent.
    Canada's inflation report for January is due on Friday, with
economists expecting the annual rate to edge up to 1.6 percent.

 (Additional reporting by Fergal Smith; Editing by Nick
Zieminski and James Dalgleish)
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