August 21, 2019 / 2:14 PM / a year ago

CANADA FX DEBT-Loonie strengthens as domestic inflation beats estimates

    * Canadian dollar rises 0.4% against the greenback
    * Canada's annual inflation rate held steady in July at 2.0%
    * U.S. oil prices increase by 1.4%
    * Bond prices move lower across the yield curve

    By Levent Uslu
    TORONTO, Aug 21 (Reuters) - The Canadian dollar strengthened
against its U.S. counterpart on Wednesday, rebounding from a
two-month low it hit the previous session, after
stronger-than-expected domestic inflation data.
    Canada's annual inflation rate held steady in July at 2.0%
as lower costs for services were offset by higher prices for
durable goods. Analysts had expected the annual rate to fall to
1.7% from 2.0% in June.            
    The Canadian dollar          was trading 0.4% higher at
1.3263 to the greenback, or 75.40 U.S. cents, at 9:43 a.m. ET
(1343 GMT). The currency, which on Tuesday touched its weakest
intraday level since June 19, was trading in a range of 1.3254
to 1.3324.
    The rise for the loonie came as the price of oil, one of
Canada's major exports, rose on Wednesday after industry data
showed a larger than expected drop in U.S. crude inventories,
but gains were capped by lingering worries about a possible
global recession.             
    U.S. crude oil futures        were up 1.4% at $56.94 a
    Canada's retail sales data is due on Friday, with a Reuters
poll forecasting a 0.1% decrease, which could help guide
expectations about the Bank of Canada's interest rate decision.
    Canadian government bond prices were lower across the yield
curve, with the two-year            down 7.5 Canadian cents to
yield 1.382% and the 10-year             falling 54 Canadian
cents to yield 1.214%.

 (Reporting by Levent Uslu; editing by Jonathan Oatis)
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