September 5, 2019 / 8:14 PM / 3 months ago

REFILE-CANADA FX DEBT-C$ reverses from 3-week high as economic data boosts greenback

 (To add bank name in third paragraph)
    * Canadian dollar dips 0.1% against the greenback
    * Loonie touches its strongest intraday since Aug. 13 at
1.3192
    * Price of U.S. oil increases 4 cents
    * Canada's 10-year yield touches a near two-week high at
1.279%

    By Fergal Smith
    TORONTO, Sept 5 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Thursday, pulling back from a
three-week high reached after the Bank of Canada's interest rate
decision, as encouraging U.S. data boosted the greenback.    
    The U.S. dollar        pared its decline against a basket of
major currencies after data showed that U.S. services sector
activity accelerated in August and private employers boosted
hiring.                         
    "We had strong U.S. data, which helped the dollar against a
lot of things and the CAD had been a popular anti-dollar trade,"
said Greg Anderson, global head of foreign exchange strategy at
BMO Capital Markets in New York.
    Selling of the currency against sterling on the likelihood
that Brexit does not take place at the end of October added to
pressure on the Canadian dollar, Anderson said.
    At 3:45 p.m. (1945 GMT), the Canadian dollar          was
trading 0.1% lower at 1.3230 to the greenback, or 75.59 U.S.
cents. The currency's weakest level was 1.3246, while it touched
its strongest since Aug. 13 at 1.3192.
    Stocks and the price of oil, one of Canada's major exports,
were supported by hopes of progress in resolving the U.S.-China
trade feud. U.S. crude oil futures        settled 4 cents higher
at $56.30 a barrel.              
    The Canadian economy is showing "a welcome degree of
resilience" to negative shocks, said Bank of Canada Deputy
Governor Lawrence Schembri, one day after the central bank left
its benchmark interest rate on hold at 1.75%.             
    Chances of a cut at the next central bank meeting on
interest rates on Oct. 30 have tumbled to about 40% from nearly
70% before Wednesday's policy announcement.
    Expectations could move again on Friday, when Canada's
employment report for August is due.    
    Canadian government bond prices were lower across the yield
curve, in sympathy with U.S. Treasuries. The two-year           
fell 21 Canadian cents to yield 1.451% and the 10-year
            was down 125 Canadian cents to yield 1.264%.
            
    The 10-year yield touched its highest intraday level since
Aug. 23 at 1.279%.

 (Reporting by Fergal Smith; Editing by Steve Orlofsky)
  
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