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CANADA FX DEBT-Canadian dollar clings to prior-day gains as oil climbs

 (Adds dealer quotes and details throughout; updates prices)
    * Loonie trades in a range of 1.2763 to 1.2811
    * Price of U.S. oil settles 1.7% higher
    * Canadian bond yields rise across a steeper curve
    * 10-year yield notches its highest since March last year

    By Fergal Smith
    TORONTO, Feb 3 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Wednesday, with the
currency holding on to gains from the day before as oil prices
rose to a one-year high and equity markets gained ground
globally.
    World shares          rose, lifted by strong results from
Alphabet Inc           and upbeat earnings in Europe, while the
price of oil, one of Canada's major exports, settled 1.7% higher
at $55.69 a barrel as hopes for U.S. economic stimulus bolstered
the growth outlook.             
    "The Canadian dollar is deriving some support from firm West
Texas Intermediate oil prices," Rahim Madhavji, president at
KnightsbridgeFX.com, said in a note.
    "Some analysts believe that the combination of reduced US
crude inventories, and OPEC and Saudi Arabia production cuts
will support prices as rebounding economies fuel demand,"
Madhavji said.
    The Canadian dollar        was trading nearly unchanged at
1.2779 to the greenback, or 78.25 U.S. cents, after having
rallied 0.5% on Tuesday. It traded in a range of 1.2763 to
1.2811.    
    The Federal Reserve's adoption of a potentially more dovish
monetary policy framework in August has affected currency
markets but could provide a net benefit for Canada's economy,
Bank of Canada Deputy Governor Lawrence Schembri said. 
    "Our models show that despite an appreciation of the
(Canadian) dollar that might result from the Fed lowering
interest rates, on net we're better off because there's more
activity and more demand for Canadian exports," said Schembri.
    Bank of Canada interest rate expectations could be guided by
Canada's employment report for January, which is due on Friday.
    Canadian government bond yields were higher across a steeper
curve in tandem with U.S. Treasuries. The 10-year            
rose 4.2 basis points to 0.947%, its highest since March last
year.

 (Reporting by Fergal Smith; Editing by Andrea Ricci and Peter
Cooney)
  
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