November 6, 2017 / 9:49 PM / 3 years ago

CANADA FX DEBT-C$ posts 12-day high as oil rallies, Poloz awaited on Tuesday

 (Adds analyst comment and details of Ivey PMI; updates prices)
    * Canadian dollar at C$1.2708, or 78.69 U.S. cents
    * Loonie touches its strongest since Oct. 25 at C$1.2707
    * U.S. crude oil rallies 3.1 percent
    * Bond prices higher across the yield curve

    By Fergal Smith
    TORONTO, Nov 6 (Reuters) - The Canadian dollar strengthened
to a 12-day high against its U.S. counterpart on Monday as oil
climbed, while investors awaited a speech on Tuesday from Bank
of Canada Governor Stephen Poloz.
    Prices of oil, one of Canada's major exports, reached their
highest since early July 2015, as Saudi Arabia's crown prince
cemented his power over the weekend with an anti-corruption
    U.S. crude oil futures        settled 3.1 percent higher at
$57.35 a barrel.
    The combination of higher oil prices and the prospect of
further interest rate hikes from the Bank of Canada in the first
half of 2018 point to further gains for the Canadian dollar in
the short term, said Ranko Berich, head of market analysis at
Monex Canada and Monex Europe.
    Canada's central bank is expected to hold rates steady in
December after hiking twice this year. But data on Friday
showing unexpected strength in the nation's job market has
supported expectations for further increases next year.
    Poloz will discuss central banks' ability to understand
inflation, which can help guide expectations for further
interest rate hikes.
    At 4:30 p.m. EDT (2130 GMT), the Canadian dollar         
was trading at C$1.2708 to the greenback, or 78.69 U.S. cents,
up 0.4 percent.    
    The currency touched its strongest since Oct. 25 at
    The pace of purchasing activity in Canada picked up in
October to its strongest in 21 months as inventories and prices
climbed, according to Ivey Purchasing Managers Index data.
    Still, speculators have cut bullish bets on the loonie, data
from the U.S. Commodity Futures Trading Commission and Reuters
calculations showed on Friday. As of Oct. 31, Canadian dollar
net long positions had slipped to 57,839 contracts from 72,332 a
week earlier.
    Canadian government bond prices were higher across the yield
curve, in sympathy with U.S. Treasuries. The two-year           
rose 4 Canadian cents to yield 1.420 percent, and the 10-year
            climbed 25 Canadian cents to yield 1.926 percent.

 (Reporting by Fergal Smith; Editing by Lisa Von Ahn and Tom
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