August 8, 2019 / 2:23 PM / 4 months ago

CANADA FX DEBT-C$ edges higher against the greenback as oil prices jump

    * Canadian dollar rises 0.1% against the greenback
    * U.S. oil prices rise by 2.5%
    * Bond prices move higher across the yield curve

    By Levent Uslu
    TORONTO, Aug 8 (Reuters) - The Canadian dollar edged higher
against its U.S. counterpart on Thursday as oil prices rebounded
on expectations that falling crude prices may lead to production
cuts, while stronger-than-expected Chinese trade data also
helped.
    The price of oil, one of Canada's major exports, was also
supported by steadying of the yuan currency after a week of
turmoil spurred by an escalation in U.S.-China trade tensions.
U.S. crude oil futures        were up 2.5% at $52.38 a
barrel            
    Canada runs a current account deficit and exports many
commodities, including oil, so its economy is strongly affected
by changes in commodity prices.
    At 9:41 a.m. (1341 GMT), the Canadian dollar          was
trading 0.1% higher at 1.3289 to the greenback, or 75.25 U.S.
cents. The currency, which touched near its seven-week low on
Wednesday, has been on a losing streak since the beginning of
the week.
    Data released on Thursday showed Chinese exports rose 3.3%
in July from a year earlier; analysts had expected a fall of 2%.
Policymakers, meanwhile, fixed the daily value of the yuan at a
firmer level than many had expected.             
    The recovery of the loonie came as the long-term outlook for
the currency came out positive. The Canadian dollar could
strengthen against its U.S. counterpart over the coming year,
recovering ground lost since July, as Canada's economy stays
strong enough to withstand global trade uncertainty, a Reuters
poll predicted.             
    Meanwhile, new home prices in Canada fell 0.1% in June, for
the second month in a row, domestic data showed. Prices have
been flat or falling since August 2018.             
    Canadian government bond prices were higher across the yield
curve, with the two-year            down 1.5 Canadian cents to
yield 1.368% and the 10-year             rising 8 Canadian cents
to yield 1.235%.

 (Reporting by Levent Uslu; editing by Jonathan Oatis)
  
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