April 19, 2017 / 1:37 PM / 3 years ago

CANADA FX DEBT-C$ near two-week low despite higher oil prices, yields

    * Canadian dollar at C$1.3438, or 74.42 U.S. cents
    * Bond prices fall across maturity curve

    TORONTO, April 19 (Reuters) - The Canadian dollar extended
losses against its U.S. counterpart on Wednesday, hitting its
weakest level in almost two weeks even as oil prices steadied
and bond yields rose.
    At 9:13 a.m. EDT (1313 GMT), the Canadian dollar         
was trading at C$1.3438 to the greenback, or 74.42 U.S. cents,
weaker than the Bank of Canada's official Tuesday close of
C$1.3381, or 74.73 U.S. cents.
    "The recent support provided by both of CAD's key drivers
appears to be eroding amid signs of a broader turn in oil prices
and an apparent halt in the recent (CAD-supportive) narrowing in
yield spreads," Scotiabank strategists wrote in a note. 
    The currency's strongest level of the session was C$1.3376,
while its weakest level was C$1.3443.
    Oil edged higher on Wednesday as OPEC said it was committed
to eroding a global surplus of crude, but increasing shale
production in the United States and still-high global stocks
threatened to pull prices lower.      
    The Canadian dollar was underperforming a string of European
currencies but recovered some recent losses against the Japanese
    Canadian government bond prices were lower across the
maturity curve, with the price of the two-year            down 2
Canadian cents to yield 0.709 percent and the benchmark 10-year
            falling 25 Canadian cents to yield 1.459 percent.
    The Canada-U.S. two-year bond spread was -47.6 basis points,
while the 10-year spread was -74.6 basis points.

 (Reporting by Alastair Sharp; Editing by Paul Simao)
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