March 12, 2019 / 8:39 PM / in a year

CANADA FX DEBT-C$ rises to near 1-week high as U.S. inflation slows

 (Adds strategist quotes and details throughout; updates prices)
    * Canadian dollar rises 0.3 percent against the greenback
    * Price of U.S. oil gains 0.1 percent
    * Canadian bond prices rise across a flatter yield curve

    By Fergal Smith
    TORONTO, March 12 (Reuters) - The Canadian dollar
strengthened to a nearly one-week high against its U.S.
counterpart on Tuesday as oil prices rose and after tame U.S.
inflation data weighed on the greenback.
    At 3:55 p.m. (1955 GMT), the Canadian dollar          was
trading 0.3 percent higher at 1.3356 to the greenback, or 74.87
U.S. cents. The currency touched its strongest level since March
6 at 1.3353.    
    "It (the loonie) seems to have reacted to the softer read on
U.S. CPI," said Mazen Issa, a senior FX strategist at TD
Securities. "Particularly the high yielders have been better
performers following that report."
    Canada has one of the highest interest rates in the G10
following 125 basis points in tightening by the Bank of Canada
since July 2017.
    The U.S. dollar        fell against a basket of major
currencies after data showed the smallest annual gain for U.S.
consumer prices in nearly 2-1/2 years.                         
    The price of oil, one of Canada's major exports, was
supported by signs of tightening global supply after a Saudi
official said the kingdom planned to cut oil exports in April,
while the U.S. government reduced its forecast for domestic
crude output growth.             
    U.S. crude oil futures        settled 0.1 percent higher at
$56.87 a barrel.
    The six-day high for the loonie came after domestic data on
Friday showed a bumper jobs gain in February.
    Bank of Canada Senior Deputy Governor Carolyn Wilkins is due
to speak on Thursday, while Canadian manufacturing sales data
for January is due on Friday.
    Canadian government bond prices were higher across a flatter
yield curve in sympathy with U.S. Treasuries. The two-year
           rose 1 Canadian cent to yield 1.652 percent and the
10-year             was up 14 Canadian cents to yield 1.738
    The 10-year yield touched its lowest since June 2017 at
1.728 percent.

 (Reporting by Fergal Smith; Editing by Jonathan Oatis and Peter
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