August 23, 2017 / 8:51 PM / 3 years ago

CANADA FX DEBT-C$ nudges higher ahead of central bankers' conference

 (Updates with new lead paragraph, details, analyst comments,
updated figures)
    * Canadian dollar at C$1.2547, or 79.70 U.S. cents
    * Bond prices higher across the maturity curve

    By Solarina Ho
    TORONTO, Aug 23 (Reuters) - The Canadian dollar eked out a
modest gain against the U.S. dollar on Wednesday, supported in
part by firmer oil prices, as cautious investors positioned
themselves ahead of a meeting of global central bank leaders
later this week.
    With few domestic drivers to move the currency this week,
all eyes are on Jackson Hole, Wyoming, where U.S. Federal
Reserve Chair Janet Yellen and European Central Bank President
Mario Draghi are expected to speak, though neither are expected
to make new policy statements.       
    "The main story in currency markets is that people are
keeping their powder dry - we're definitely not seeing any big
directional moves in any G10 currencies at the moment," said
Karl Schamotta, director of global markets strategy at Cambridge
Global Payments.
    Oil, a key Canadian export, rose on Wednesday after data
showed U.S. crude inventories fell for the eighth straight week,
while a storm heading toward the Gulf Coast had the potential to
disrupt output. U.S. crude        prices settled at $48.41 a
barrel, up 58 cents or 1.21 percent.      
    At 4:00 p.m. ET (2001 GMT), the Canadian dollar         
traded at C$1.2547 to the greenback, or 79.70 U.S. cents, up 0.1
    The currency traded between C$1.2542 to C$1.2598 in thin
summer activity.
    The loonie has rallied nearly 7 percent since the start of
the year, buoyed by a softer greenback and upbeat domestic
economic data that prompted the Bank of Canada to raise interest
rates for the first time in seven years last month. The central
bank is expected to raise rates again this fall.
    Currency strategists were forecasting the U.S. dollar to
regain some strength in the second half of this year, however.
    Canadian government bond prices were higher across the
maturity curve, with the two-year            price up 2 Canadian
cents to yield 1.259 percent and the benchmark 10-year
            rising 31 Canadian cents to yield 1.884 percent.
    The Canada-U.S. two-year bond spread stood at -5.3 basis
points, while the 10-year spread stood at -28.8 basis points.

 (Reporting by Solarina Ho; Editing by Paul Simao and Chris
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