April 24, 2018 / 1:49 PM / 3 months ago

CANADA FX DEBT-C$ steadies near 3-week low as greenback rally pauses

    * Canadian dollar at C$1.2831, or 77.94 U.S. cents
    * Loonie touches its weakest level since April 3 at C$1.2860
    * Bond prices mixed across the yield curve

    TORONTO, April 24 (Reuters) - The Canadian dollar edged
higher against its U.S. counterpart on Tuesday after hitting a
three-week low, as oil prices held near three-year highs and the
greenback consolidated its recent gains.     
    The U.S. dollar        was little changed against a basket
of major currencies. It had climbed earlier in the day to its
highest in more than three months, supported by the recent rise
in U.S. Treasury yields.             
    The price of oil, one of Canada's major exports, was 
supported by OPEC-led production cuts, strong demand and the
prospect of renewed U.S. sanctions on Iran.             
    U.S. crude        prices were down 0.1 percent at $68.58 a
barrel.
    At 9:13 a.m. EDT (1313 GMT), the Canadian dollar         
was trading 0.1 percent higher at C$1.2831 to the greenback, or
77.94 U.S. cents.
    The currency's strongest level of the session was C$1.2814,
while it touched its weakest since April 3 at C$1.2860.
    The loonie has declined 2.2 percent since the Bank of Canada
last week indicated that more interest rate hikes would be
coming after it held its benchmark rate steady at 1.25 percent,
but said it did not know when or how aggressive it would need to
be to keep inflation in check.             
    Bank of Canada Governor Stephen Poloz on Monday gave an
upbeat assessment of the economy's prospects after a sluggish
first quarter and said that while inflation this year would rise
above the central bank's target, it would be temporary.
            
    Canadian government bond prices were mixed across the yield
curve, with the two-year            up 0.5 Canadian cent to
yield 1.916 percent and the 10-year             flat to yield
2.355 percent.
    On Monday, the 10-year yield touched its highest in more
than two months at 2.365 percent.    
    Canadian Prime Minister Justin Trudeau said a deadly van
attack in Toronto on Monday had not changed the country's threat
level or security preparations for a G7 summit in Quebec in
June.             
    While the incident has the hallmarks of other deadly vehicle
assaults by Islamic State supporters in the United States and
Europe, officials have said it did not represent a threat to
national security.             

 (Reporting by Fergal Smith
Editing by Susan Thomas)
  
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