May 2, 2018 / 8:58 PM / 2 years ago

CANADA FX DEBT-C$ retreats from 9-day high as Fed stays on track for June hike

 (Adds strategist quotes and details throughout, updates prices)
    * Canadian dollar at C$1.2879, or 77.65 U.S. cents
    * Loonie touches its strongest since April 23 at C$1.2803
    * Bond prices lower across steeper yield curve
    * 10-year yield touches 2-1/2-month high at 2.387 percent

    By Fergal Smith
    TORONTO, May 2 (Reuters) - The Canadian dollar fell against
its broadly stronger U.S. counterpart on Wednesday, pulling back
from an earlier nine-day high, as investors worried about global
growth prospects and the Federal Reserve stayed on course to
hike interest rates in June.
    At 4 p.m. (2000 GMT), the Canadian dollar          was
trading 0.2 percent lower at C$1.2879 to the greenback, or 77.65
U.S. cents.
    The currency touched its strongest level since April 23 at
C$1.2803, while its weakest was C$1.2889. It hit on Tuesday its
weakest point in more than three weeks at C$1.2914.
    "It is an extension of the position-squaring theme that we
have seen play out," said Bipan Rai, North America head, FX
strategy, at CIBC Capital Markets. "It seems to be this concern
about global growth and whether or not it truly is synchronous."
    Doubts about the strength of growth outside the United
States have helped boost the U.S. dollar recently against a
basket of major currencies.
    The greenback climbed to its highest level in more than four
months as the Fed held interest rates steady and expressed
confidence that a recent rise in inflation to near the U.S.
central bank's target would be sustained.             
    "June still remains very much in play when it comes to the
Fed," Rai said.        
    U.S. crude        prices settled 1 percent higher at $67.93
a barrel. Oil is one of Canada's major exports.             
    Canadian government bond prices were lower across a steeper
yield curve, with the two-year            down 1 Canadian cent
to yield 1.935 percent and the 10-year             falling 19
Canadian cents to yield 2.363 percent.
    The 10-year yield touched its highest intraday since Feb. 15
at 2.387 percent.
    Canada's trade data for March is due on Thursday.

 (Reporting by Fergal Smith; Editing by Nick Zieminski and Peter
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