July 17, 2019 / 2:46 PM / 4 months ago

CANADA FX DEBT-C$ strengthens as domestic data points to rebounding growth

    * Canadian dollar rises 0.2% against the greenback
    * Canada's annual inflation rate falls to 2.0% in June
    * U.S. oil futures increase by 0.3% 
    * Canada's 10-year yield touches a nine-day low at 1.550%

    By Levent Uslu
    TORONTO, July 17 (Reuters) - The Canadian dollar gained
against the greenback on Wednesday, paring some of the previous
day's decline, as oil prices rose and domestic data supported
the view that the economy is recovering after a slow patch at
the turn of the year.
    At 10:29 a.m. (1429 GMT), the Canadian dollar          was
trading 0.2% higher at 1.3069 to the greenback, or 76.52 U.S.
cents. The currency, which has pulled back from a near
nine-month high last Friday at 1.3018, traded in a range of
1.3053 to 1.3093.
    Lower energy prices helped push down Canada's annual
inflation rate in June to 2.0% from 2.4% in May, while factory
sales rose by 1.6% in May, the most in a year, data from
Statistics Canada showed.             
    "I think the narrative that we've been talking about is
still broadly in place, that growth in Canada is bouncing back
after a soft winter and inflation pressures are still right
around 2%," said Nathan Janzen, a senior economist at Royal Bank
of Canada.
    "I think it's fair to say that the Canadian manufacturing
sector has held up a little better than say the U.S.
manufacturing sector has year-to-date," Janzen said.    
    Meanwhile, the price of oil, one of Canada's major exports,
rose after a sharp decline on Tuesday. U.S. crude oil futures
       were up 0.3% at $57.80 a barrel.             
    Canadian government bond prices were higher across the yield
curve in sympathy with U.S. Treasuries after data showed
weakness in the U.S. housing market and as concerns about the
trade war between the United States and China boosted demand for
safe haven debt.             
    The two-year            rose 1 Canadian cent to yield 1.556%
and the 10-year             was up 17 Canadian cents to yield
1.568%.
    The 10-year yield touched its lowest intraday since July 8
at 1.550%.

 (Reporting by Levent Uslu; additional reporting by Fergal Smith
Editing by Marguerita Choy)
  
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