November 26, 2019 / 9:54 PM / 12 days ago

CANADA FX DEBT-Canadian dollar gains as trade deal optimism boosts stocks

 (Adds strategist quotes and details throughout; updates prices)
    * Canadian dollar rises 0.2% against the greenback
    * CN Rail and union reach deal to end strike
    * Loonie trades in a range of 1.3273 to 1.3316
    * Canadian bond prices rise across a flatter yield curve

    By Fergal Smith
    TORONTO, Nov 26 (Reuters) - The Canadian dollar strengthened
against the greenback on Tuesday, paring its decline since
October as optimism rose on U.S.-China trade talks and after a
deal was reached to end a railway strike that threatened to slow
Canada's economic growth.
    U.S. stocks rose to a record high after President Donald
Trump said the United States and China were close to an
agreement on the first phase of a deal.             
    "Equity markets are still pretty happy, so there is no
reason to sell Canada further at this point," said Michael
Goshko, corporate risk manager at Western Union Business
Solutions.
    Canada runs a current account deficit and is a major
exporter of commodities, including oil, so its economy could
benefit from an improved outlook for the global flow of capital
or trade. U.S. crude oil futures        rose 0.6% to $58.35 a
barrel.
    At 4:01 p.m. (2101 GMT), the Canadian dollar          was
trading 0.2% higher at 1.3274 to the greenback, or 75.34 U.S.
cents. The currency traded in a range of 1.3273 to 1.3316.
    The loonie has been pressured since October by a more dovish
stance from the Bank of Canada. Last Wednesday, it hit its
weakest intraday level since Oct. 10 at 1.3328.
    "We are seeing a little bit of position squaring" by
investors after major trendline support for the loonie held
around 1.3330, Goshko said.
    Canada's longest railroad strike in a decade ended as
Canadian National Railway Co         , the country's biggest
railroad, reached a tentative agreement with workers. But
shippers warned it could take weeks before service bounces back
to normal.             
    Economists estimated that a prolonged strike could have cost
the Canadian economy billions of dollars. Data for Canada's
third-quarter gross domestic product is due on Friday.
    Canadian government bond prices were higher across a flatter
yield curve in sympathy with U.S. Treasuries. The two-year
           rose 3 Canadian cents to yield 1.567% and the 10-year
            was up 23 Canadian cents to yield 1.437%.

 (Reporting by Fergal Smith; Editing by Nick Zieminski and Peter
Cooney)
  
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