June 6, 2017 / 8:52 PM / in 5 months

CANADA FX DEBT-C$ strengthens to nearly 1-week high, boosted by oil

 (Adds dealer quotes and updates prices)
    * Canadian dollar at C$1.3439, or 74.41 U.S. cents
    * Loonie touches its strongest since May 31 at C$1.3438
    * Bond prices higher across much of a flatter yield curve
    * 10-year yield touches a nearly seven-month low at 1.373
percent

    By Fergal Smith
    TORONTO, June 6 (Reuters) - The Canadian dollar strengthened
on Tuesday to a nearly one-week high against its U.S.
counterpart as oil prices rose, but the range was narrow ahead
of key events later in the week.
    At 4 p.m. EDT (2000 GMT), the Canadian dollar          was
trading at C$1.3439 to the greenback, or 74.41 U.S. cents, up
0.3 percent.
    The currency's weakest level of the session was C$1.3485,
while it touched its strongest since May 31 at C$1.3438.
    "There is not a lot of conviction in the markets," said
Scott Lampard, head of global markets at HSBC Bank Canada.
    "A lot of clients have got themselves to be where they want
to be risk wise and they are just waiting for Thursday's three
developments."
    The European Central Bank meeting, a parliamentary election
in the UK and testimony by former U.S. FBI Director James Comey
to a Senate committee are due on Thursday.    
    Prices of oil, one of Canada's major exports, found
technical support after sliding below $47 a barrel on pressure
from a diplomatic rift in the Middle East and sustained high
crude inventories in the United States.             
    U.S. crude oil futures settled 79 cents higher at $48.19 a
barrel.
    The Bank of Canada's review of developments in the financial
system is also due on Thursday, followed by a news conference
with Governor Stephen Poloz. Investors will weigh Poloz's
assessment of the health of the housing and mortgage markets in
light of recent troubles at non-bank lender Home Capital.
    U.S. Treasury yields and the U.S. dollar        dropped to
seven-month lows and world stocks slid as political uncertainty
from the United States to the Middle East pushed investors away
from risky assets.             
    Canadian government bond prices were higher across most of a
flatter yield curve in sympathy with U.S. Treasuries. The
10-year             rose 18 Canadian cents to yield 1.393
percent. It touched its lowest intraday since Nov. 10 at 1.373
percent.
    "What we are seeing is a rotation out of the riskier end of
the fixed income market into lower-risk credit instruments"
Lampard said.

 (Reporting by Fergal Smith; Editing by Chris Reese)
  

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