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CANADA FX DEBT-Canadian dollar dips as hedge fund default crimps risk appetite

    * Canadian dollar weakens 0.1% against the greenback
    * Loonie trades in a range of 1.2571 to 1.2626
    * Price of U.S. oil rises 0.3%
    * Canadian bond yields ease across a flatter curve

    TORONTO, March 29 (Reuters) - The Canadian dollar edged
lower against its U.S. counterpart on Monday as the default of a
U.S. hedge fund weighed on investor sentiment, offsetting higher
oil prices.
    U.S. stock index futures dropped after Wall Street's surge
in the prior session as major lenders came under pressure on
concerns over possible spillover effects after the hedge fund
default.             
    Oil, one of Canada's major exports, rose on expectations the
OPEC+ group of leading producers will keep output unchanged in
May, and worries that operations in the Suez Canal might take
weeks to return to normal even though a ship blocking it has
been partly refloated.             
    U.S. crude        prices were up 0.3% at $61.12 a barrel,
while the Canadian dollar        was trading 0.1% lower at
1.2592 to the greenback, or 79.42 U.S. cents.
    The currency traded in a range of 1.2571 to 1.2626. Last
Thursday, it touched a two-week low at 1.2628.
    Speculators have reduced their bullish bets on the Canadian
dollar to the lowest this year, data from the U.S. Commodity
Futures Trading Commission showed. As of March 23, net long
positions had decreased to 5,103 contracts from 10,263 in the
prior week.             
    COVID-19 variant cases are increasing rapidly in several
parts of Canada and longer-range forecasts show that stronger
public health restrictions will be required to counter the
spread of the disease, health officials said on Friday.
                
    Canada's GDP data for January, due on Wednesday, could guide
expectations on the Bank of Canada policy outlook. Strategists
say the central bank could reduce its bond purchases in April.
            
    Canadian government bond yields were lower across a flatter
curve in tandem with U.S. Treasuries on Monday. The 10-year
            fell 3.3 basis points to 1.468%, having pulled back
from a 14-month high earlier this month at 1.677%.

 (Reporting by Fergal Smith
Editing by Bernadette Baum)
  
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