April 3, 2019 / 1:47 PM / 7 months ago

CANADA FX DEBT-C$ firms as fears ease of a global economic slowdown

    * Canadian dollar rises 0.1% against the greenback
    * Price of U.S. oil gains 0.1%
    * Canada's auto sales fall 2.5% year-over-year in March
    * Canadian bond prices decline across steeper yield curve

    TORONTO, April 3 (Reuters) - The Canadian dollar edged
higher against its U.S. counterpart on Wednesday as upbeat
Chinese data calmed fears of a global economic slowdown and as
hopes rose of a trade deal between China and the United States.
    World stocks rallied to six-month highs, helped by signs of
progress in U.S.-China trade talks and reassuring economic data.
            
    Activity in China's services sector picked up to a 14-month
high in March, a private business survey showed, adding to signs
that government stimulus policies are gradually kicking in.
            
    Canada exports many commodities, including oil, so its
economy could be helped by an improved outlook for the global
economy.
    The price of oil held near its highest this year, supported
by OPEC-led supply cuts and U.S. sanctions. U.S. crude oil
futures        were up 0.1% at $62.64 a barrel.             
    At 9:15 a.m. (1315 GMT), the Canadian dollar          was
trading 0.1% higher at 1.3325 to the greenback, or 75.05 U.S.
cents.
    The currency's strongest level of the session was 1.3297,
matching Monday's 11-day high, while its weakest was 1.3353.
    The loonie has strengthened 2.4 percent since the start of
the year but has given up some ground since February as data
showed weakening of the domestic economy.
    Canada's auto sales fell 2.5 percent in March from a year
earlier, marking 13 straight months of declines, according to
industry data released on Tuesday.             
    Canada's employment report for March is due on Friday.
    Canadian government bond prices were lower across a steeper
yield curve in sympathy with U.S. Treasuries. The two-year
           fell 4 Canadian cents to yield 1.583% and the 10-year
            declined 33 Canadian cents to yield 1.705%.
    Canada's 10-year yield rose 4 basis points further above the
yield on the 3-month T-bill to reach a spread of 4.2 basis
points, which could temper the recession concerns of some
investors.             
    Canada's curve inverted in March for the first time since
2007.

 (Reporting by Fergal Smith; Editing by Bernadette Baum)
  
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