July 11, 2019 / 1:09 PM / 3 months ago

CANADA FX DEBT-C$ nears 8-month high, boosted by Fed rate cut prospects

    * Canadian dollar rises 0.2% against the greenback
    * Canadian new home prices dip 0.1% in May
    * Price of U.S. oil increases 0.2%
    * Canada's yield curve steepens

    TORONTO, July 11 (Reuters) - The Canadian dollar
strengthened against its U.S. counterpart on Thursday,
approaching last week's eight-month high, as oil prices rose and
as the greenback broadly declined following dovish comments by
Federal Reserve Chair Jerome Powell.
    The U.S. dollar        was stuck at a five-day low after
Powell on Wednesday kept the door open for U.S. interest rate
cuts.             
    In contrast, the Bank of Canada made clear on Wednesday it
had no intention of easing monetary policy even as it
highlighted the risks trade wars posed to the global economy.
            
    The price of oil, one of Canada's major exports, rose as oil
rigs in the Gulf of Mexico were evacuated ahead of a storm,
while an incident involving a British tanker in the Middle East
highlighted tensions in the region. U.S. crude oil futures
       were up 0.2% at $60.52 a barrel.             
    At 8:53 a.m. (1253 GMT), the Canadian dollar          was
trading 0.2% higher at 1.3052 to the greenback, or 76.62 U.S.
cents. The currency, which last Thursday notched an eight-month
high at 1.3038, traded in a range of 1.3042 to 1.3080. 
    New home prices in Canada fell 0.1% in May, after prices
were flat for the previous three months, Statistics Canada said
on Thursday.             
    Canada's yield curve steepened in sympathy with U.S.
Treasuries after data showing U.S. underlying consumer prices
increased by the most in nearly 1-1/2 years in June.             
    The two-year            rose 1.5 Canadian cents to yield
1.577% and the 10-year             was down 5 Canadian cents to
yield 1.591%.

 (Reporting by Fergal Smith; editing by Jonathan Oatis)
  
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