April 10, 2017 / 1:57 PM / 6 months ago

CANADA FX DEBT-C$ strengthens as oil rallies, housing starts jump

    * Canadian dollar at C$1.3357, or 74.87 U.S. cents
    * Bond prices mixed across the maturity curve

    TORONTO, April 10 (Reuters) - The Canadian dollar
strengthened against its U.S. counterpart on Monday as oil
prices rose and the government reported housing starts jumped to
their highest level in more than nine years.
    The seasonally adjusted annual rate of housing starts rose
to 253,720 units in March, topping economists' forecasts for
215,000. February was revised slightly higher to 214,253
units.            
    U.S. crude        prices were up 1.15 percent at $52.84 a
barrel, supported by a renewed shutdown at Libya's largest
oilfield and heightened tension over Syria following the U.S.
missile strike.             
    Oil is one of Canada's major exports.
    At 9:22 a.m. ET (1322 GMT), the Canadian dollar          was
trading at C$1.3357 to the greenback, or 74.87 U.S. cents,
stronger than Friday's close of C$1.3410, or 74.57 U.S. cents.
    The currency traded in a range of C$1.3357 to C$1.3425.
    On Friday, the loonie touched its strongest in four days at
C$1.3343 after Canadian jobs data added to evidence that the
domestic economy is improving.
    Economists expect the Bank of Canada could raise its
first-quarter growth forecast when it releases its interest rate
announcement and latest economic outlook on Wednesday.
    Still, the central bank is widely expected to hold rates at
0.50 percent and may stick to its cautious tone given the number
of uncertainties facing the Canadian economy, particularly U.S.
trade policy.
    Speculators have increased bearish bets on the Canadian
dollar to the most since March 2016, data from the Commodity
Futures Trading Commission and Reuters calculations showed on
Friday. Canadian dollar net short positions increased to 30,225
contracts as of April 4 from 28,217 a week earlier.    
    Canadian government bond prices were mixed across the yield
curve, with the two-year            up 1 Canadian cent to yield
0.757 percent and the benchmark 10-year             rising 12
Canadian cents to yield 1.583 percent.
    On Friday, the 10-year yield touched a more than four-month
low at 1.505 percent.    

 (Reporting by Fergal Smith, Editing by W Simon)
  
 

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