August 22, 2017 / 8:38 PM / 3 years ago

CANADA FX DEBT-C$ steady ahead of central bankers' Jackson Hole meeting

 (Recasts lead paragraph, adds analyst comment, updates market
    * Canadian dollar at C$1.2568, or 79.57 U.S. cents
    * Bond prices lower across the maturity curve

    By Solarina Ho
    TORONTO, Aug 22 (Reuters) - The Canadian dollar was
marginally weaker against its U.S. counterpart on Tuesday
despite firmer oil prices, as the greenback rallied ahead of the
annual Jackson Hole conference of global central bankers.
    Earlier in the session, the loonie had touched its strongest
in three weeks after robust domestic retail sales data for June
bolstered expectations the Bank of Canada could raise interest
rates again in October.             
    The strength of the economy this year helped spur the
central bank last month to raise rates for the first time in
nearly seven years.
    "Canadian data has persistently surprised on the upside,"
said Mazen Issa, senior FX strategist at TD Securities, adding
it gave more credence for the central bank to raise interest
rates again sometime this fall. "Certainly the economy is firing
on all cylinders."
    But he cautioned the loonie was vulnerable to data
    The currency touched C$1.2526 to the U.S. dollar, or 79.83
U.S. cents, after the retail figures were released, its
strongest since Aug. 1, before giving up gains.
    At 4:00 p.m. ET (2000 GMT), the Canadian dollar          was
trading at C$1.2568, or 79.57 U.S. cents, down 0.1 percent.
    Its weakest level of the session was C$1.2595.
    With little Canadian economic data on tap for the remainder
of the week, the central bank summit in Wyoming was the main
focal point for investors who are hoping for insight into
monetary policy outlook. 
    The greenback rebounded after falling for two straight days,
bolstered by position-squaring and some caution ahead of the
    Canadian government bond prices were lower across the
maturity curve, with the two-year            price down 3.5
Canadian cents to yield 1.269 percent and the benchmark 10-year
            falling 34 Canadian cents to yield 1.921 percent.
    The Canada-U.S. two-year bond spread stood at -5.7 basis
points, while the 10-year spread stood at -29.4 basis points.

 (Reporting by Solarina Ho; Editing by Chris Reese)
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