February 26, 2019 / 4:46 PM / 20 days ago

CANADA FX DEBT-C$ claws back losses as oil rises, Fed signals patience

    * Canadian dollar near flat against the greenback
    * Price of U.S. oil rises 0.7 percent 
    * Canadian bond prices rise across the yield curve

    TORONTO, Feb 26 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Tuesday, reversing an
early decline as oil prices rose and Federal Reserve Chairman
Jerome Powell signaled patience on raising interest rates
further.
    The price of oil, one of Canada's major exports, rose as
OPEC was expected to stick to production cuts despite pressure
from U.S. President Donald Trump. U.S. crude oil futures       
were up 0.7 percent at $55.87 a barrel.                 
    U.S. Federal Reserve Chairman Jerome Powell said rising
risks and soft economic data should not prevent solid U.S.
growth this year, but the Fed will remain "patient" in deciding
on further interest rate hikes.             
    At 11:13 a.m. (1613 GMT), the Canadian dollar          was
trading nearly unchanged at 1.3190 to the greenback, or 75.82
U.S. cents. The currency traded in a range of 1.3185 to 1.3236.
    The loonie steadied a day after it notched its strongest
price in nearly three weeks at 1.3113 before turning lower as
oil prices slumped. Over coming days, Canadian markets will
watch domestic economic data which could guide expectations for
next week's interest rate decision by the Bank of Canada. 
    Canada's inflation report for January is due on Wednesday
and fourth-quarter gross domestic product data is due on Friday.
    Canadian government bond prices were higher across the yield
curve in sympathy with U.S. Treasuries. The two-year           
rose 3.5 Canadian cents to yield 1.764 percent and the 10-year
            climbed 17 Canadian cents to yield 1.875 percent.
    A Bank of Canada working group proposes expanding the range
of transactions used in the calculation of the Canadian
Overnight Repo Rate Average (CORRA) interest-rate benchmark,
according to a consultation paper published by the central bank.
            

 (Reporting by Fergal Smith; Editing by David Gregorio)
  
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