May 16, 2019 / 2:16 PM / 2 months ago

CANADA FX DEBT-C$ posts 6-day high as data shows economy strengthening

    * Canadian dollar rises 0.1% against the greenback
    * Loonie touches its strongest since May 10 at 1.3401
    * Canadian factory sales rise 2.1% in March
    * Canadian bond prices fall across the yield curve

    TORONTO, May 16 (Reuters) - The Canadian dollar rose to a
nearly one-week high against its U.S. counterpart on Thursday as
oil prices climbed and domestic factory data showed
strengthening in the economy.
    Canadian factory sales were up by 2.1% in March from
February on higher motor vehicle sales, as well as petroleum and
coal products, Statistics Canada said. Analysts surveyed by
Reuters had forecast a 1.1% increase in the value of shipments.
    "Today's reading suggests a likely healthy advance in March
monthly GDP, and will support the street's view that growth will
outperform the Bank of Canada's pessimistic view for Q1," said
Royce Mendes, senior economist at CIBC Capital Markets in a
note.
    The central bank has projected the economy grew by 0.3% in
the first three months of the year after barely any growth in
the fourth quarter. Bank of Canada Governor Stephen Poloz and
deputy governor Carolyn Wilkins will take media questions at
11:15 a.m. (1515 GMT), after the release of the central bank's
review of the Canadian financial system.
    Canada added 61,700 jobs in April, the second straight month
of robust jobs gains, led by hiring in the education and health
services and construction sectors, according to a report from
ADP.             
    The price of oil, one of Canada's major exports, rose for a
third day running as fears of supply disruption amid heightened
tensions in the Middle East overshadowed swelling U.S. crude
inventories. U.S. crude oil futures        were up 1.8% at
$63.12 a barrel.             
    At 9:57 a.m. (1357 GMT), the Canadian dollar          was
trading 0.1% higher at 1.3420 to the greenback, or 74.52 U.S.
cents. The currency touched its strongest since May 10 at
1.3401.
    Gains for the loonie came even a the U.S. dollar        rose
to its highest levels in a week against a basket of currencies.
Investors focused on trade war tensions, while the euro was hurt
by concerns about this weekend's European parliamentary
elections.             
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries after data showing
stronger-than-expected U.S. housing starts in April.
    The two-year            fell 4.5 Canadian cents to yield
1.606% and the 10-year             was down 18 Canadian cents to
yield 1.686%.

 (Reporting by Fergal Smith
Editing by Susan Thomas)
  
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