May 23, 2017 / 1:38 PM / in 5 months

CANADA FX DEBT-C$ notches nearly 1-month high on rising oil prices

    * Canadian dollar at C$1.3464, or 74.27 U.S. cents
    * Loonie touches its strongest since April 24 at C$1.3457
    * Bond prices mixed across the yield curve

    TORONTO, May 23 (Reuters) - The Canadian dollar strengthened
on Tuesday to a nearly one-month high against its U.S.
counterpart as oil prices extended recent gains ahead of a
meeting of major producers and domestic data showed solid growth
in wholesale trade.
    The value of Canadian wholesale trade rose by 0.9 percent in
March from February to hit a record, pushed up by demand for
building materials and supplies, Statistics Canada said.
            
    The data points to a "healthy increase" in gross domestic
product for the month, CIBC Capital Markets economist Nick
Exarhos said in a research note. 
     The price of oil, one of Canada's major exports, rose as
expectations that the Organization of the Petroleum Exporting
Countries and other producers will extend output cuts offset
U.S. President Donald Trump's plan to sell off half of the
country's huge oil stockpile.             
    U.S. crude        was up 0.20 percent at $51.23 a barrel.
    At 9:14 a.m. EDT (1314 GMT), the Canadian dollar         
was trading at C$1.3464 to the greenback, or 74.27 U.S. cents,
up 0.3 percent.
    The currency's weakest level of the session was C$1.3509,
while it touched its strongest since April 24 at C$1.3457.
    Speculators have ramped up bearish bets on the Canadian
dollar to a record high, data from the Commodity Futures Trading
Commission and Reuters calculations showed on Friday. Canadian
dollar net short positions rose to 98,000 contracts as of May 16
from 86,215 a week earlier.             
    The Bank of Canada is widely expected to hold interest rates
at 0.50 percent on Wednesday.
    Domestic data on Friday showed that the central bank's
measures of core inflation remained muted in April. But some
economists worry that leaving low rates in place for too long
could lead to too much borrowing and leave the economy
vulnerable if growth slows or home prices drop.
                        
    Canadian government bond prices were mixed across the yield
curve as the market reopened following the Victoria Day holiday
on Monday.
    The two-year            price was flat to yield 0.674
percent, and the 10-year             edged up 8 Canadian cents
to yield 1.462 percent.

 (Reporting by Fergal Smith; Editing by Lisa Von Ahn)
  
 

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