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CANADA FX DEBT-Canadian dollar pares its monthly decline as economy recovers further

    * Canadian dollar rises 0.2% against the greenback
    * Canadian GDP rises 3% in July
    * Loonie touches its weakest level since Aug. 4 at 1.3420
    * Canada's 10-year             rises half a basis point to
0.541%

    TORONTO, Sept 30 (Reuters) - The Canadian dollar edged
higher against its U.S. counterpart on Wednesday as domestic
data showed the economy continuing to recover in recent months,
with the loonie rebounding from an earlier 8-week low hit amid
U.S. political uncertainty.
    The Canadian economy expanded by 3% in July as businesses
across the country continued to reopen from coronavirus
shutdowns, Statistics Canada said, with growth seen gaining at a
slower 1% month-on-month pace in August.             
    World stocks          fell and safer assets such as the yen
       and U.S. dollar        found buyers after a chaotic first
U.S. presidential debate and rising COVID-19 cases turned
investors cautious, though strong factory surveys boosted
China's markets.             
    The Canadian dollar        was trading 0.2% higher at 1.3366
to the greenback, or 74.82 U.S. cents, having touched its
weakest intraday level since Aug. 4 at 1.3420.
    The currency was on track to decline 2.4% in September,
ending a five-month streak of gains, as the resurgence in the
pandemic weighs on investor sentiment.
    The price of oil, one of Canada's major exports, fell for a
second day as rising coronavirus infections prompted concerns
about further restrictions on global economic activity that
could curb fuel demand. U.S. crude        prices were down 0.1%
at $39.26 a barrel.             
    Canada's federal authorities and its two biggest provinces
on Tuesday promised new measures to combat a second COVID-19
wave that is notching up as many cases as during the pandemic's
peak in April.                 
    Canadian government bond yields edged higher across much of
the curve on Wednesday, with the 10-year             up half a
basis point at 0.541%.    
    Canadian home prices, which rallied more sharply than
expected this year, are set to rise by less than consumer
inflation next year as higher unemployment and lower immigration
levels cool down the market, a Reuters poll of analysts showed.
            

 (Reporting by Fergal Smith
Editing by Nick Zieminski)
  
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