June 3, 2020 / 12:54 PM / a month ago

CANADA FX DEBT-Loonie pulls back from 3-month high ahead of BoC rate decision

    * Canadian dollar dips 0.1% against the greenback
    * Loonie touches a near 3-month high intraday at 1.3476
    * Price of U.S. oil decreases 0.5%
    * Canadian bond yields rise across a steeper curve

    TORONTO, June 3 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Wednesday as oil prices fell and
ahead of an interest rate decision by the Bank of Canada, with
the loonie pulling back from its highest in nearly three months.
    The price of oil, one of Canada's major exports, was
pressured by doubts that an early meeting of OPEC and its allies
to extend existing output cuts will take place. U.S. crude
       prices were down 0.5% at $36.64 a barrel.
    The Bank of Canada will hold interest rates at a record low
of 0.25% until at least the end of next year as the economy
reels from the coronavirus crisis, according to nearly every
economist polled by Reuters.             
    The interest rate decision, which is due at 10 a.m. (1400
GMT), will be the first with Tiff Macklem as governor of the
central bank. He begins his seven-year term today.
    Canadian labor productivity rose 3.4% in the first quarter,
the largest quarterly increase recorded, as hours worked fell
faster than business output, Statistics Canada said.
    The Canadian dollar        was trading 0.1% lower at 1.3526
to the greenback, or 73.93 U.S. cents. The currency touched its
strongest intraday level since March 9 at 1.3476.
    The loonie has rallied since hitting a four-year low in
March as investors grew more optimistic about a global economic
recovery. World shares          reached three-month highs on
Wednesday as a closely watched survey of service sector activity
in China              recovered to pre-epidemic levels in May.
    Canadian government bond yields rose across much of a
steeper yield curve, with the 10-year yield             up 1.7
basis points at 0.559%.

 (Reporting by Fergal Smith; Editing by Steve Orlofsky)
  
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