January 28, 2016 / 3:11 PM / 4 years ago

CANADA FX DEBT-C$ rallies to a 3-week high as oil prices surge

* Canadian dollar at C$1.4012 or 71.37 U.S. cents
    * Currency touches its strongest level in three weeks at
    * Bond prices lower across the maturity curve

    TORONTO, Jan 28 (Reuters) - The Canadian dollar rallied to a
three-week high against its U.S. counterpart on Thursday as
crude oil prices rose, while the potential for a U.S. Federal
Reserve rate hike in March was not aided by weaker-than-expected
U.S. data.
    Oil rose above $34 per barrel, supported by the possibility
that major producers may cooperate to cut production.
    New orders for long-lasting U.S. manufactured goods tumbled
5.1 percent in December, the latest sign that economic growth
weakened significantly at the end of 2015. 
    The U.S. Federal Reserve kept interest rates unchanged on
Wednesday and said it was "closely monitoring" global economic
and financial developments. 
    At 9:52 a.m. EST (1452 GMT), the Canadian dollar 
was trading at C$1.4012 to the greenback, or 71.37 U.S. cents,
stronger than the Bank of Canada's official close of C$1.4103,
or 70.91 U.S. cents.
    The currency touched its strongest level since Jan. 5 at
C$1.3948, while its weakest level was C$1.4120.
    Canadian average weekly earnings of non-farm payroll
employees were little changed in November, Statistics Canada
said. The number of non-farm payroll jobs decreased by 28,100 in
the same month following an increase of 43,300 in October.
    Canadian government bond prices were lower across the
maturity curve, with the two-year price down 4.5
Canadian cents to yield 0.446 percent and the benchmark 10-year
 falling 21 Canadian cents to yield 1.269 percent.
    The Canada-U.S. two-year bond spread was 2 basis points less
negative at -39.5 basis points as U.S. Treasuries outperformed
at the front of the curve.
    Canadian gross domestic product data for November is awaited
on Friday, expected to show a rebound in growth after October's

 (Reporting by Fergal Smith; Editing by Nick Zieminski)
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