April 13, 2018 / 2:06 PM / 2 years ago

CANADA FX DEBT-C$ holds onto recent gains as U.S. mulls rejoining TPP

    * Canadian dollar at C$1.2593, or 79.41 U.S. cents
    * Bond prices lower across much of the yield curve

    TORONTO, April 13 (Reuters) - The Canadian dollar steadied
on Friday against its U.S. counterpart but was on track to
advance 1.5 percent for the week as stocks rose and the United
States weighed the prospect of rejoining the Trans Pacific
Partnership (TPP) trade pact.
    U.S. stocks rose after a trio of big banks reported strong
quarterly results, while geopolitical risks and concerns over
trade war eased.             
    Canada's commodity-linked currency tends to track movement
in stocks due to the signals that market may send about
prospects for economic growth.
    U.S. President Donald Trump said the United States would
only join the TPP, a multinational trade deal his administration
walked away from last year, if it offered "substantially better"
terms than those provided under previous negotiations.
    Canada was one of eleven countries that signed the agreement
last month.
    U.S. crude        prices were up 0.3 percent at $67.29 a
barrel. Oil, one of Canada's major exports, has been boosted
this week by Trump's comments about possible military action in
Syria and reports of dwindling global oil stocks.             
    At 9:37 a.m. EDT (1337 GMT), the Canadian dollar         
was little changed at C$1.2593 to the greenback, or 79.41 U.S.
cents. The currency traded in a range of C$1.2553 to C$1.2595.
    On Wednesday, the loonie touched its strongest in more than
seven weeks at C$1.2545.
    In addition to higher oil prices, the currency has benefited
recently from investor optimism over a deal to revamp the North
American Free Trade Agreement, stronger-than-expected domestic
jobs data and an upbeat business survey from the Bank of Canada.
    The central bank is likely to raise interest rates twice
more this year as the economy regains momentum in the current
quarter but will hold them steady at its April 18 meeting,
according to a Reuters poll of economists.             
    Resales of Canadian homes rose 1.3 percent in March from
February as gains in Ottawa and Montreal helped offset declines
elsewhere, but recent mortgage rule changes have left both
buyers and sellers uncertain, the Canadian Real Estate
Association said.             
    Canadian government bond prices were lower across much of
the yield curve in sympathy with U.S. Treasuries. The two-year
           dipped 0.5 Canadian cent to yield 1.899 percent and
the 10-year             declined 1 Canadian cent to yield 2.286
    The 10-year yield touched its highest intraday since March
21 at 2.288 percent.       

 (Reporting by Fergal Smith; Editing by Bernadette Baum)
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