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CANADA FX DEBT-C$ rises with oil; finance minister shows comfort with currency strength
September 13, 2017 / 1:43 PM / 3 months ago

CANADA FX DEBT-C$ rises with oil; finance minister shows comfort with currency strength

    * Canadian dollar at C$1.2157, or 82.26 U.S. cents
    * Bond prices lower across a steeper yield curve
    * U.S. crude prices rise 0.87 percent
    * Lending to Canadian small businesses climbs in July

    TORONTO, Sept 13 (Reuters) - The Canadian dollar edged
higher on Wednesday against its U.S. counterpart as oil prices
rose and after Canada's finance minister indicated he could live
with a more robust currency.
    Finance Minister Bill Morneau told Reuters in an interview
late on Tuesday that the recent rise of the currency reflected
the country's economic strengths.             
    The Canadian dollar has rallied more than 13 percent against
the U.S. greenback since early May and touched its strongest in
more than two years on Friday.
    Prices of oil, one of Canada's major exports, rose after the
International Energy Agency (IEA) said the global oil surplus
was starting to shrink due to robust demand and an output drop
from major producers.             
    U.S. crude        prices were up 0.87 percent at $48.65 a
barrel.
    At 9:17 a.m. ET (1317 GMT), the Canadian dollar          was
trading at C$1.2157 to the greenback, or 82.26 U.S. cents, up
0.2 percent.
    The currency traded in a range of C$1.2131 to C$1.2186.
    Gains for the loonie came as data showed that lending to
Canadian small businesses climbed to the highest level in 1-1/2
years in July, pointing to a pickup in corporate spending that
could help underpin recent economic strength.             
    Canada's economy has expanded at a rapid pace this year,
prompting the Bank of Canada to raise interest rates in July and
last week after sitting on the sidelines for nearly seven years.
    The U.S. dollar        firmed, with traders wary of taking
new positions on the currency ahead of inflation data due on
Thursday that will be closely watched by the Federal Reserve as
it considers when to next raise rates.             
    Canadian government bond prices were lower across a steeper
yield curve, with the two-year            down 0.5 Canadian cent
to yield 1.55 percent and the 10-year             falling 13
Canadian cents to yield 2.059 percent.
    The gap between the 10-year yield and its U.S. equivalent
narrowed by 1.6 basis points to a spread of -11.2 basis points.
It was as wide as -84.0 basis points near the end of May.       
 
    Canada's new housing price index for July is due on Thursday
and August home sales data is awaited on Friday.

 (Reporting by Fergal Smith; Editing by Meredith Mazzilli)
  
 

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