CANADA’S FX DEBT – Canadian dollar posts weekly gain as Wall Street rallies


(Add quotes and strategists details; update prices) * The Canadian dollar gains 0.4% against the greenback * The Canadian economy likely grew 0.7% in August * The price of oil US stands 1.1% higher * Canadian bond yields ease on flatter curve By Fergal Smith TORONTO, Oct. 1 (Reuters) – The Canadian dollar strengthened against its US counterpart on Friday as stock markets were climbing and national data showed the economy rebounded in August, leaving the currency slightly higher for the week. The loonie was trading up 0.4% to 1.2630 against the greenback, or 79.18 cents US, after trading in a range of 1.2628 to 1.2738. For the week, the currency rose 0.2% even as the greenback posted strong gains against a basket of major currencies. The Canadian dollar was helped on Friday by “a tone of risk reappearing in the markets and also by the slight improvement we are seeing in oil prices,” said Kurt Reiman, senior investment strategist for North America at BlackRock . Wall Street moved forward in a large rally, after sorting through conflicting news about the economy, the battle against COVID-19 and legislative wrangling in Washington early in the fourth quarter. “We still believe that this pro-cyclical economic environment is favorable for equities and that the loonie generally has this pro-cyclical trend,” Reiman said. Procyclical currencies tend to benefit from global economic growth. Canada is a major producer of raw materials, including oil. US crude oil futures were up 1.1% to $ 75.88 per barrel, supported by tight supplies due to OPEC + supply restrictions. The Canadian economy grew 0.7% in August following a slight contraction in July, driven by growth in the hotel industry, according to preliminary data. Separate data showed that Canadian manufacturing activity increased in September at a pace that was little changed from the robust level of the previous month, while global supply shocks helped push down measures of l inflation at record levels. Yields on Canadian government bonds were lower on a flatter curve, following the movement of yields on US Treasuries. The 10-year fell 3.5 basis points to 1.473%, after hitting its nearly four-month high on Tuesday at 1.526%. (Reporting by Fergal Smith; Editing by Mark Heinrich and Ken Ferris)

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