June 20, 2018 / 1:26 PM / 2 years ago

CANADA FX DEBT-C$ steadies near a one-year low as oil prices rise

    * Canadian dollar at C$1.3286, or 75.27 U.S. cents
    * Loonie touches its weakest since June 22, 2017 at C$1.3312
    * Price of U.S. oil rises 1.2 percent
    * Bond prices mixed across the yield curve

    TORONTO, June 20 (Reuters) - The Canadian dollar steadied
against its U.S. counterpart on Wednesday as oil prices rose but
the currency held near its weakest level in nearly one year amid
uncertainty about the outlook for global trade.
    At 9:07 a.m. EDT (1307 GMT), the Canadian dollar         
was trading nearly unchanged at C$1.3286 to the greenback, or
75.27 U.S. cents. The currency touched its weakest level since
June 22, 2017, at C$1.3312.
    The price of oil, one of Canada's major exports, was
supported by reports of a drop in U.S. commercial crude
inventories and the loss of storage capacity in Libya.
    U.S. crude        prices rose 1.2 percent to $65.85 a
    An escalating trade conflict between the United States and
China kept investors from buying higher-yielding currencies and
markets braced for growing volatility.             
    Canada runs a current account deficit so its currency could
suffer if volatility rises. The country is in a trade feud with
the United States and also in slow-moving talks with the U.S.
and Mexico to revamp the North American Free Trade Agreement.
    The Canadian government believes a deal to update the NAFTA
trade pact is possible despite a U.S. move to impose tariffs on
Canadian and Mexican steel and aluminum, Foreign Minister
Chrystia Freeland said on Tuesday.             
    Canadian government bond prices were mixed across the yield 
curve, with the two-year            flat to yield 1.846 percent
and the 10-year             rising 5 Canadian cents to yield
2.156 percent.
    On Tuesday, the 10-year yield touched its lowest in more
than two months at 2.146 percent.
    Canadian inflation data for May and the April retail sales
report are due out on Friday.

 (Reporting by Fergal Smith
Editing by Bill Trott)
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