July 25, 2017 / 1:29 PM / 5 months ago

CANADA FX DEBT-C$ holds near 14-month highs as greenback softens, oil firms

    * Canadian dollar at C$1.2489 or 80.07 U.S. cents
    * Bond prices lower across the maturity curve

    TORONTO, July 25 (Reuters) - The Canadian dollar firmed
against the greenback on Tuesday, as the U.S. dollar slid
against a basket of currencies and oil prices climbed on
promises by major producers to help control oversupply.
    The combination of a weaker U.S. dollar, higher oil prices
and robust economic data helped push the Canadian dollar to its
strongest level in 14 months on Monday, breaching the C$1.25, or
80 U.S. cents, level.
    At 9:10 a.m. ET (1310 GMT), the Canadian dollar          was
trading at C$1.2489 to the greenback, or 80.07 U.S. cents, up
0.2 percent.
    The currency's strongest level of the session was C$1.2487,
while its weakest level was C$1.2526.
    The next key level analysts are eyeing is C$1.2461, or 80.25
U.S. cents, hit in May 2016.
    The currency has gained some 10 percent since early May,
while the spread between yields of Canadian and U.S. 2-year
bonds has narrowed sharply since June and sits at 7.2 basis
points, its narrowest in more than a year.
    The U.S. dollar fell to a more than one-year low against its
rivals ahead of a two-day Federal Reserve meeting that starts
later on Tuesday. Markets are giving a less than 50 percent
probability of a interest rate increase before the end of the
year, according to CME's Fed watch tool.       
    Prices of crude oil, a key Canadian export, strengthened
further after Saudi Arabia promised to curb exports and the
Organization of the Petroleum Exporting Countries and non-OPEC
producers discussed extending their deal to cut output beyond
March 2018 if necessary.      
    U.S. crude        prices were up 2.03 percent to $47.28 a
barrel.
    Canadian government bond prices were lower across the
maturity curve, with the two-year            price down 5.5
Canadian cents to yield 1.307 percent and the benchmark 10-year
            falling 54 Canadian cents to yield 1.987 percent.

 (Reporting by Solarina Ho; Editing by Meredith Mazzilli)
  
 

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