July 17, 2020 / 7:22 PM / a month ago

CANADA FX DEBT-C$ little changed vs U.S. dollar; bond yields higher

    * Bond yields up across maturity curve
    * Oil prices fall, initially weigh on CAD
    * U.S. coranavirus cases surge; Canada new infections up

 (Recasts, adds comment, updates prices)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, July 17 (Reuters) - The Canadian dollar was little
changed against a broadly weaker U.S. dollar in thin trading on
Friday, with prices alternating between gains and losses, as
traders struggled to find near-term direction for the currency
pair ahead of the weekend.
    The Canadian currency earlier was pressured by lower crude
oil prices in the face of mounting uncertainty about the
recovery in energy demand as new coronavirus cases surged. 
    The Canadian dollar was an outlier in the commodity currency
world, as the Australian and New Zealand dollars, as well as the
Norwegian crown, gained versus the greenback even while oil
prices slid.
    In afternoon trading, the Canadian unit was flat at C$1.3571
per U.S. dollar         . On the week, the Canadian dollar was
up around 0.1%.
    "I think the Canadian dollar is still in an uptrend
vis-a-vis the U.S. dollar," said Erik Bregar, head of FX
strategy at Exchange Bank of Canada in Toronto. "We saw that
solidified twice by the market failing to get above $1.37 in
dollar/CAD." 
    "If we get some kind of catalyst that moves August crude oil
prices decisively above $41 per barrel, that could be the next
positive catalyst for the Canadian dollar to push it below $1.35
versus the U.S. dollar," he added.
    Action Economics, in its daily blog, said the dollar/Canada
pair has posted its narrowest intra-day trading band in weeks,
amid generally stable oil prices and a "fairly neutral risk
backdrop." 
    Brent crude futures         fell 0.5% to $43.14 per barrel,
while U.S. West Texas Intermediate (WTI) crude        slipped
0.3% to $40.63 per barrel. Oil prices weakened as the United
States posted another surge in coronavirus cases.
    The U.S. Centers for Disease Control and Prevention on
Friday reported a total of 3,555,877 cases of new coronavirus
infections, an increase of 72,045 cases from its previous count.
The number of deaths rose by 926 to 137,864.             
    Canada reported 109,266 total cases and 8,827 deaths.
    Canada's deputy chief public health officer, Howard Njoo,
said the daily case count rose to an average of 350 over the
last week, up from 300 a day earlier in July.             
    In the bond market, Canadian government debt yields rose
across the curve, with the two-year            yield up at
0.282%, from 0.265% late on Thursday. 
    The benchmark Canadian 10-year yield rose to 0.529%
            from Thursday's 0.504%.

 (Reporting by Gertrude Chavez-Dreyfuss; 
Editing by Alistair Bell and Leslie Adler)
  
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