February 15, 2018 / 9:36 PM / 4 months ago

CANADA FX DEBT-C$ holds near 10-day high as greenback broadly falls

 (Adds dealer quotes and details, updates prices)
    * Canadian dollar at C$1.2485, or 80.10 U.S. cents
    * Loonie touches its strongest since Feb. 5
    * Oil prices rise 1.2 percent
    * Canada's 5-year yield posts a more than 4-year high

    By Fergal Smith
    TORONTO, Feb 15 (Reuters) - The Canadian dollar edged higher
against its U.S. counterpart on Thursday to hold near an earlier
10-day high, but the loonie lost ground against some other major
currencies as investors bet on a shift in global capital flows.
    At 4 p.m. (2100 GMT), the Canadian dollar          was
trading 0.1 percent higher at C$1.2485 to the greenback, or
80.10 U.S. cents. The currency touched its strongest level since
Feb. 5 at C$1.2466.
    Against the euro, it hit its weakest intraday since February
2016 at C$1.5644.
    "Capital is moving out of the Americas," said Scott Lampard,
head of global markets at HSBC Bank Canada. "While Canada is
appreciating versus the U.S. dollar, it is underperforming some
of the other regions that are actually seeing some major
(capital) inflows."
    The U.S. dollar        fell across the board, hitting a
15-month low against the yen, as negative sentiment around the
U.S. currency outweighed a rise in 10-year Treasury yields to
their highest levels in four years.             
    "The general view seems to be that valuations are better in
Europe, they are better in emerging markets," Lampard said.
    The weaker greenback helped boost the price of oil, one of
Canada's major exports. U.S. crude oil futures        settled
1.2 percent higher at $61.34 a barrel.             
    The Bank of Canada's cautious approach to further rate hikes
does not mean rates will stay low forever, as policymakers also
have to weigh inflationary pressures, Bank of Canada Deputy
Governor Lawrence Schembri said.             
    Canadian government bond prices were little changed across
the yield curve, with the five-year            flat to yield
2.154 percent and the 10-year             rising 1 Canadian cent
to yield 2.373 percent.
    The five-year yield posted its highest intraday since
September 2013 at 2.173 percent.
    Resales of Canadian homes dropped 14.5 percent in January
from December to the lowest monthly level in three years as
tighter mortgage rules doused demand, the Canadian Real Estate
Association said.             
    Canada added 10,700 jobs in January, driven by hiring in
construction and leisure and hospitality, according to a report
from ADP.             
    The country's manufacturing sales report for December is due
on Friday.

 (Reporting by Fergal Smith; Editing by Meredith Mazzilli and
Peter Cooney)
  
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