June 4, 2018 / 1:44 PM / in 5 months

CANADA FX DEBT-C$ rises vs weaker greenback as risk appetite improves

    * Canadian dollar at C$1.2923, or 77.38 U.S. cents
    * Bond prices little changed across the yield curve

    TORONTO, June 4 (Reuters) - The Canadian dollar strengthened
against its U.S. counterpart on Monday as the greenback broadly
fell and risk appetite improved.
    At 9:17 a.m. EDT (1317 GMT), the Canadian dollar        was
trading 0.2 percent, or 77.38 U.S. cents, higher at C$1.2923 to
the greenback.
    The currency, which rose 0.2 percent last week, traded in a
range of C$1.2900 to C$1.2959.
    The U.S. dollar       slipped against a basket of major
currencies as easing Italian political tensions boosted the euro
and investors' appetite for risk.                 
    Stocks and some other risk-sensitive assets, like the
commodity-linked Canadian dollar, rose despite lingering worries
about an escalating trade battle between the United States and
other major economies.
    Finance leaders of the closest U.S. allies vented anger over
the Trump administration's metal import tariffs on Saturday,
ending a three-day meeting with a stern rebuke of Washington and
setting up a heated fight at a G7 summit next week in Quebec.
            
    The uncertainty over rising trade tensions and escalating
retaliation in response to U.S. import tariffs means the Bank of
Canada will be data-dependent as it sets monetary policy,
Governor Stephen Poloz said on Saturday.             
    Expectations for a July interest rate hike were boosted last
week by a more-hawkish-than-expected policy statement from the
Bank of Canada. But data on Thursday showing Canada's economy
grew at a weaker-than-expected pace in the first quarter
undercut expectations for a rate additional rate hikes after
July.              
    Speculators have cut bearish bets on the Canadian dollar,
data from the U.S. Commodity Futures Trading Commission and
Reuters calculations showed on Friday. As of May 29, net short
positions fell to 15,690 contracts from 26,212 a week earlier.
            
    The price of oil, one of Canada's major exports, were little
changed as U.S. production hit a record high and OPEC members
considered boosting supply. U.S. crude        prices were up
0.05 percent at $65.84 a barrel.
    Canadian government bond prices were little changed across
the yield curve, with the 10-year             flat to yield
2.247 percent.     

 (Reporting by Fergal Smith
Editing by Alistair Bell)
  
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