December 20, 2017 / 9:24 PM / a year ago

CANADA FX DEBT-Domestic wholesale trade data, oil lift Canadian dollar

 (Adds strategist comment, updates prices)
    * Canadian dollar at C$1.2827, or 77.96 U.S. cents
    * Bond prices lower across the maturity curve

    Dec 20 (Reuters) - The Canadian dollar strengthened against
its U.S. counterpart on Wednesday after domestic data showed
wholesale trade rose more than expected in October, which could
bode well for economic growth at the start of the fourth
quarter.
    Increased purchases of machinery and equipment, as well as
household goods, drove the value of Canadian wholesale trade up
1.5 percent, data showed.             
    The report also "started shifting expectations for another
Bank of Canada rate hike as soon as January," said Mazen Issa, a
senior currency strategist at TD Securities.
    The rise could also mean October growth data, due on Friday,
comes in stronger than forecast, although Thursday's retail
sales report will also be key, Nick Exarhos, economist at CIBC,
wrote in a note.
    "I'm definitely looking for the Canadian dollar to
strengthen" this week on the back of the data deluge, TD's Issa
said, but added that it could then reverse course in January as
hopes for early 2018 central bank hikes fade and NAFTA risk
rises.
    The Canadian dollar touched a session high of C$1.2819 after
the data was released, its highest since Dec. 15. 
    At 4 p.m EST (2100 GMT), the Canadian dollar          was
trading at C$1.2827 to the greenback, or 77.96 U.S. cents, up
0.4 percent.
    An uptick in oil prices also lent support to the loonie as
crude rose on expectations of a fall in U.S. inventories. 
    U.S. crude        prices were up 0.9 percent to $58.08 a
barrel, while Brent crude         added 1.2 percent to
$64.55.     O/R]
    Canadian government bond prices were largely lower across
the maturity curve, with the two-year            price down 5.5
Canadian cents to yield 1.634 percent and the benchmark 10-year
            falling 44 Canadian cents to yield 1.988 percent.

 (Reporting by Alastair Sharp in Toronto and Leah Schnurr in
Ottawa; Editing by Susan Thomas and Peter Cooney)
  
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