November 26, 2019 / 9:52 PM / 7 months ago

CANADA FX DEBT-Canadian dollar gains as trade deal optimism boosts stocks

 (Adds strategist quotes and details throughout; updates prices)
    * Canadian dollar rises 0.2% against the greenback
    * CN Rail and union reach deal to end strike
    * Loonie trades in a range of 1.3273 to 1.3316
    * Canadian bond prices rise across a flatter yield curve

    By Fergal Smith
    TORONTO, Nov 26 (Reuters) - The Canadian dollar strengthened
against the greenback on Tuesday, paring its decline since
October as optimism rose on U.S.-China trade talks and after a
deal was reached to end a railway strike that threatened to slow
Canada's economic growth.
    U.S. stocks rose to a record high after President Donald
Trump said the United States and China were close to an
agreement on the first phase of a deal.             
    "Equity markets are still pretty happy, so there is no
reason to sell Canada further at this point," said Michael
Goshko, corporate risk manager at Western Union Business
    Canada runs a current account deficit and is a major
exporter of commodities, including oil, so its economy could
benefit from an improved outlook for the global flow of capital
or trade. U.S. crude oil futures        rose 0.6% to $58.35 a
    At 4:01 p.m. (2101 GMT), the Canadian dollar          was
trading 0.2% higher at 1.3274 to the greenback, or 75.34 U.S.
cents. The currency traded in a range of 1.3273 to 1.3316.
    The loonie has been pressured since October by a more dovish
stance from the Bank of Canada. Last Wednesday, it hit its
weakest intraday level since Oct. 10 at 1.3328.
    "We are seeing a little bit of position squaring" by
investors after major trendline support for the loonie held
around 1.3330, Goshko said.
    Canada's longest railroad strike in a decade ended as
Canadian National Railway Co         , the country's biggest
railroad, reached a tentative agreement with workers. But
shippers warned it could take weeks before service bounces back
to normal.             
    Economists estimated that a prolonged strike could have cost
the Canadian economy billions of dollars. Data for Canada's
third-quarter gross domestic product 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 3 Canadian cents to yield 1.567% and the 10-year
            was up 23 Canadian cents to yield 1.437%.

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