April 29, 2019 / 8:43 PM / 5 months ago

CANADA FX DEBT-Loonie rises as U.S. data boosts Canada's exports outlook

 (Adds strategist quote and details throughout; updates prices)
    * Canadian dollar rises 0.1% against the greenback
    * Price of U.S. oil increases 0.3%
    * Canadian bond prices fall across a steeper yield curve

    By Fergal Smith
    TORONTO, April 29 (Reuters) - The Canadian dollar edged
higher against its U.S. counterpart on Monday as oil prices rose
and data showing higher U.S. consumer spending bolstered
prospects for Canada's exports.
    U.S. consumer spending increased by the most in more than
9-1/2 years in March as households stepped up purchases of motor
vehicles, but price pressures remained muted, with a key
inflation measure posting its smallest annual gain in 14 months.
            
    "The possibility that the U.S. continues to operate as the
consumer of last resort for the global economy would help to
brighten Canada's export prospects," said Karl Schamotta,
director global markets strategy at Cambridge Global Payments.
    Canada sends about 75% of its exports to the United States,
including oil.  
    The price of oil rose as the market attempted to resume a
weeks-long rally that was halted on Friday when U.S. President
Donald Trump demanded that producer club OPEC raise output to
soften the impact of U.S. sanctions against Iran.             
    U.S. crude        prices settled 0.3% higher at $63.50 a
barrel.
    At 4:09 p.m. (2009 GMT), the Canadian dollar          was
trading 0.1% higher at 1.3448 to the greenback, or 74.36 U.S.
cents. The currency, which touched a nearly four-month low at
1.3522 last Wednesday, traded in a range of 1.3440 to 1.3479.
    The U.S. dollar        fell against a basket of currencies,
slipping further from a 23-month high, ahead of a Federal
Reserve interest rate decision on Wednesday. Traders awaited
more data to convince them whether to add to their bullish
positions in the greenback.                    
    Canada's gross domestic product data for February is due on
Tuesday, which could help guide expectations for economic growth
in the first quarter.
    Last week, the Bank of Canada lowered its growth forecast
for 2019 to 1.2% from 1.7% and held its benchmark interest rate
steady at 1.75% as it worried about a number of headwinds for
the domestic economy, including trade uncertainty.             
    An expanding list of Canadian farm exports is hitting
obstacles at Chinese ports, leaving sellers of soybeans, peas
and pork scrambling amid a bitter diplomatic dispute.    
            
    Canadian government bond prices were lower across a steeper
yield curve in sympathy with U.S. Treasuries. The two-year
           fell 3.5 Canadian cents to yield 1.564% and the
10-year             declined 33 Canadian cents to yield 1.722%.

 (Reporting by Fergal Smith; Editing by Paul Simao and Peter
Cooney)
  
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