September 13, 2018 / 1:38 PM / 2 years ago

CANADA FX DEBT-C$ notches 2-week high as risk appetite rises

    * Canadian dollar at C$1.2986, or 77.01 U.S. cents
    * Canada's Freeland says won't hold NAFTA talks
    * Canadian new home prices rise 0.1 percent in July
    * Bond prices higher across the yield curve

    TORONTO, Sept 13 (Reuters) - The Canadian dollar
strengthened to a two-week high against its U.S. counterpart on
Thursday as worries receded of an escalated trade dispute
between the United States and China and as the greenback broadly
    Signs of movement in the U.S.-China trade stand-off and a
bumper interest rate hike in emerging market trouble spot Turkey
sent world shares higher as risk appetite returned.             
    Canada exports many commodities and runs a current account
deficit, so its economy could be hurt if the global flow of
trade or capital slows.
    The U.S. dollar        weakened against a basket of major
currencies following data that showed U.S. consumer prices rose
at a slower pace than analysts expected.             
    At 9:13 a.m. (1313 GMT), the Canadian dollar          was
trading 0.1 percent higher at C$1.2986 to the greenback, or
77.01 U.S. cents. The currency touched its strongest since Aug.
30 at C$1.2976.
    The loonie has been boosted this week by higher oil prices
and optimism that a deal to renew the North American Free Trade
Agreement would be reached.
    Canadian Foreign Minister Chrystia Freeland on Wednesday
said officials needed to do more work before she could hold
fresh talks with the United States on renewing NAFTA as time
runs out to reach a deal.             
    The price of oil, one of Canada's major exports, slipped
back from four-month highs as investors focused on the risk that
emerging market crises and trade disputes could dent demand even
as supply tightens.             
    U.S. crude        prices were down 1.3 percent at $69.47 a
    New home prices in Canada increased by 0.1 percent in July 
from the prior month, matching the forecast of analysts. The
year-over-year increase slowed to 0.5 percent from 0.8 percent
in June.             
    Canadian government bond prices were higher across the yield
curve in sympathy with U.S. Treasuries. The 10-year            
climbed 15 Canadian cents to yield 2.318 percent.
    On Wednesday, the 10-year yield touched its highest in more
than one month at 2.347 percent.

 (Reporting by Fergal Smith
Editing by Susan Thomas)
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