March 26, 2019 / 8:30 PM / 7 months ago

CANADA FX DEBT-C$ strengthens as calm returns to global markets

 (Adds strategist quotes and details on activity; updates
prices)
    * Loonie gains 0.1 percent against the U.S. dollar
    * Price of U.S. oil rises 1.9 percent
    * Bond prices fall across the yield curve

    By Fergal Smith
    TORONTO, March 26 (Reuters) - The Canadian dollar edged
higher against its U.S. counterpart on Tuesday as stocks and oil
prices rose, with the loonie extending its rebound from a
two-week low a day earlier.
    Calm returned to global markets as a steadier day for stocks
and a tick higher in benchmark bond yields helped ease nerves
after a jarring few days dominated by recession worries.
            
    "It seems to be similar to what we have seen recently where
risk (appetite) has been driving the loonie," said Erik Nelson,
a currency strategist at Wells Fargo in New York. "We are seeing
relative outperformance on the back of higher oil prices and a
pretty solid performance for stocks today. So CAD is getting a
boost from that."
    The price of oil, one of Canada's major exports, rose as
attention centered on geopolitical factors tightening supplies
that are leading to falling exports from Venezuela and declining
U.S. inventories. U.S. crude oil futures        settled 1.9
percent higher at $59.94 a barrel.             
    At 4:13 p.m. (2013 GMT), the Canadian dollar          was
trading 0.1 percent higher at 1.3386 to the greenback, or 74.70
U.S. cents. The currency, which touched its lowest level in more
than two weeks at 1.3445 on Monday, traded in a range of 1.3373
to 1.3412.
    The loonie rose despite news that China has expanded its ban
on Canadian canola imports to include shipments from Viterra Inc
         . The ban is the latest development in a wider trade
dispute between the two countries that could weigh on Canada's
economy.             
    Canada's trade report for January is due on Wednesday, while
January gross domestic product data is due on Friday.
    Canadian government bond prices were lower across the yield
curve, with the two-year            down 4.5 Canadian cents to
yield 1.506 percent and the 10-year             falling 19
Canadian cents to yield 1.571 percent.
    On Monday, the 10-year yield hit its lowest intraday level
since June 2017 at 1.532 percent.    

 (Reporting by Fergal Smith
Editing by Susan Thomas and Leslie Adler)
  
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