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CANADA FX DEBT-Canadian dollar holds near 6-year high as greenback slides

    * Canadian dollar dips 0.1% against the greenback
    * Canadian factory sales likely fell 1.1% in April
    * Loonie trades in a range of 1.2029 to 1.2058
    * Canadian 10-year yield hits a 2-week low at 1.505%

    By Fergal Smith
    TORONTO, May 25 (Reuters) - The Canadian dollar edged lower
against its broadly weaker U.S. counterpart on Tuesday as
domestic data showed a likely drop for manufacturing sales in
April, but the currency stayed within reach of last week's
6-year high.    
    The loonie        was trading 0.1% lower at 1.2049 to the
greenback, or 82.99 U.S. cents, having traded in a range of
1.2029 to 1.2056.
    Last Tuesday, the loonie touched its strongest since May
2015 at 1.2013. It has climbed 5.7% since the start of the year,
the biggest gain among G10 currencies, bolstered by higher
commodity prices and a hawkish shift last month from the Bank of
Canada.
    "There appears to be little concern at the central bank
about the CAD and the message is clear that the central bank
will keep policy settings aligned with the economy as it works
towards its goals," strategists at Scotiabank, including Shaun
Osborne, said in a note.
    "We continue to target a deeper push below 1.20 in the
coming months," the strategists said.
    Speculators have raised their bullish bets on the Canadian
dollar to the highest since November 2019, data from the U.S.
Commodity Futures Trading Commission (CFTC) showed on Friday.
    The U.S. dollar        on Monday hit 4-1/2 month lows
against a basket of peers as insistence from the U.S. Federal
Reserve that policy would stay pat calmed fears about inflation
forcing rates higher.             
    Canadian factory sales likely fell 1.1% in April from March,
giving back some of the previous month's increase, a flash
estimate from Statistics Canada showed. The decrease was mostly
attributed to lower sales in the transportation equipment
industry.             
    The price of oil, one of Canada's major exports, was
supported by tempered expectations of an early return of oil
exporter Iran to international crude markets. U.S. crude       
prices were up 0.1% at $66.13 a barrel.                 
    Canadian government bond yields were lower across a flatter
curve. The 10-year             hit its lowest since May 10 at
1.505% before edging up to 1.508%, down 3.5 basis points on the
day.

 (Reporting by Fergal Smith; Editing by Andrea Ricci)
  
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