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CANADA FX DEBT-C$ edges higher against U.S. dollar but weaker oil prices weigh

    * Canadian dollar at C$1.3562 or 73.74 U.S. cents
    * Bond prices mixed across the maturity curve

    By Saqib Iqbal Ahmed
    July 20 (Reuters) - The Canadian dollar edged higher against
its U.S. counterpart on Monday, but its gains were capped as oil
prices came under pressure, unnerved by the prospect of rising
coronavirus cases halting a recovery in fuel demand.
    The Canadian dollar        was at C$1.3562 to the greenback,
or 73.74 U.S. cents, slightly stronger than Friday's close of
C$1.3578, or 73.65 U.S. cents.
    The loonie has been in a narrow range against the greenback
for the last seven weeks bouncing between C$1.3717 and C$1.3313.
    "Spot is stuck in very familiar ranges again this morning,"
Shaun Osborne Chief FX strategist at Scotia Bank said in a note.
    "We think USDCAD is liable to remain range bound for now but
the CAD is likely to continue to lose some ground on the
crosses," he said.
    The loonie was about 0.2% lower against the euro.
    The price of oil, one of Canada's major exports, fell on
Monday as coronavirus cases increased in many countries across
the globe, but investors remained cautiously optimistic about
ongoing talks over a European Union recovery fund to revive
economies affected by the pandemic.             
    "The CAD’s correlation with risk is weakening but remains
elevated while its correlation with crude is picking up,
suggesting perhaps that the market’s focus is switching to more
domestically-relevant drivers," Osborne said.
    Canadian government bond prices were mixed across the
maturity curve, with the two-year            yield at 0.277%, up
from 0.272% late on Friday, while the benchmark Canadian 10-year
            yield fell to 0.504% from Friday's 0.525%.

 (Reporting by Saqib Iqbal Ahmed; editing by Jonathan Oatis)
  
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