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CANADA FX DEBT-Canadian dollar dips as 'hot streak' takes a breather

 (Adds strategist quotes and details throughout, updates prices)
    * Canadian dollar weakens 0.2% against the greenback
    * Loonie trades in a range of 1.2473 to 1.2540
    * Price of U.S. oil settles 0.2% higher
    * Canadian bond yields ease across much of a flatter curve

    By Fergal Smith
    TORONTO, March 22 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Monday as investors took stock
of central bank policy announcements and after Canada's No. 2
railroad operator agreed to a $25 billion deal to buy a U.S.
rail company.
    The Canadian dollar        was trading 0.2% lower at 1.2524
to the greenback, or 79.85 U.S. cents, having traded in a range
of 1.2473 to 1.2540.    
    "We have just passed through a wave of central bank meetings
with the Fed being the most crucial one," said Mazen Issa,
senior FX strategist at TD Securities. "Markets in general are
finding their footing again."
    The U.S. dollar        got a boost last week from higher
Treasury yields after the Federal Reserve said the U.S. economy
was on track for strong growth.
    Since the start of the year, the loonie has gained 1.6%,
which is the best performance among G10 currencies.
    "We are not seeing price action in the CAD space that
suggests the hot streak in the Canadian dollar is coming to an
end. If anything I think it is probably going to be a
beneficiary of U.S. outperformance as far as the economy is
concerned," Issa said.
    Canada sends about 75% of its exports to the United States,
including oil. Crude futures        settled 0.2% higher at
$61.55 a barrel as hopes for a pick-up in demand later this year
helped arrest last week's broad sell-off.                 
    Canadian Pacific's         cash-and-stock offer for Kansas
City Southern         is not expected to close until the middle
of 2022, which could delay the potential impact on foreign
exchange flows.             
    Still, "it's  a notable size for the Canadian dollar
market," Issa said.       
    Canadian government bond yields were mixed across a flatter
curve. The 10-year             fell 3.5 basis points to 1.553%,
extending its pullback from a 14-month high on Thursday at
1.677%.

 (Reporting by Fergal Smith; Editing by Nick Zieminski and Grant
McCool)
  
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