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CANADA’S FX DEBT – Canadian dollar posts weekly gain as Fed impact wears off

By on June 25, 2021 0

(Add quotes and strategist details, update prices) * The Canadian dollar strengthens 0.2% against the greenback * For the week, the loonie gains 1.3% * The price of US oil Settles 1% at $ 74.05 per barrel * Canadian 10-year yield increases 4.4 basis points to 1.460% By Fergal Smith TORONTO, June 25 (Reuters) – The Canadian dollar edged up against its US counterpart on Friday as oil prices rose and investors worried less about the Federal Reserve’s shift to more hawkish stances, with the currency adding to this week’s gains. The loonie was trading up 0.2% to 1.2300 against the greenback, or 81.30 cents US, after trading in a range of 1.2271 to 1.2329. It was up 1.3% for the week, recouping some of its decline from the week before when the Federal Reserve surprised markets by forecasting it would start raising interest rates in 2023 rather than quitting the market. ‘in 2024. a complete game changer,’ said Alvise Marino, FX strategist at Credit Suisse in New York. “The fact that the Fed was able to introduce a bit of hawkishness into the rhetoric but without causing a crisis (in the bond market)… is something that has allowed risky assets to perform well,” said Marino. The S&P 500 Index hit an all-time high as weaker-than-expected US inflation data allayed concerns about a sudden decrease in the Fed’s stimulus. Oil, one of Canada’s top exports, posted a fifth straight week of gains as demand growth is expected to outstrip supply. US crude oil futures were up 1% on Friday at $ 74.05 a barrel. Canada predicts COVID-19 infections will decline rapidly over the next two months, but the more contagious Delta variant is likely to cause a larger than expected resurgence of cases later this year, health officials said public. Canadian government bond yields rose on a steeper curve, following the movement of US Treasuries. The 10-year was up 4.4 basis points to 1.460%, extending its rebound from last Friday’s 3.5-month low of 1.364%. (Reporting by Fergal Smith; editing by Jonathan Oatis and Nick Zieminski)