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CANADA FX DEBT-Canadian dollar recoups much of its decline as oil climbs

 (Adds strategist quote and details throughout; updates prices)
    * Canadian dollar weakens 0.1% against greenback
    * Price of U.S. oil increases 1.6%
    * Bank of Canada's BOS indicator reaches a record high
    * Canadian bond yields rise across a steeper curve

    By Fergal Smith
    TORONTO, July 5 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Monday, but clawed back much of
its earlier decline as oil prices increased and a survey by the
Bank of Canada showed that business sentiment in Canada
continues to improve.
    The loonie        was trading 0.1% lower at 1.2330 to the
greenback, or 81.10 U.S. cents, recovering from an intraday low
of 1.2371.
    "The move looks to be connected to the market's response to
the OPEC meeting and the crude price rally," said Eric Theoret,
global macro strategist at Manulife Investment Management.
    The price of oil       , one of Canada's major exports, rose
1.6% after OPEC+ nations called off talks on output levels,
meaning no deal to boost production has been agreed.
            
    On Friday, the Canadian dollar notched its biggest gain in
eight weeks, advancing nearly 1%, after the U.S. nonfarm
payrolls report suggested space for the Federal Reserve to wait
before tightening monetary policy.
    U.S. financial markets were closed on Monday, observing the
Independence Day holiday.
    Speculators have raised their bullish bets on the Canadian
dollar to the highest level in four weeks, data from the U.S.
Commodity Futures Trading Commission showed on Friday. As of
June 29, net long positions had increased to 45,801 contracts
from 43,225 in the prior week.
    The Bank of Canada's Business Outlook Survey (BOS) Indicator
reached its highest level on record in the second quarter, in
part due to base-year effects, but also as positive sentiment
became more widespread.             
    The central bank is due to make a policy announcement next
week, with some analysts expecting another cut to the pace of
bond purchases.
    Canadian government bond yields were higher across a steeper
curve. The 10-year             rose 2.9 basis points to 1.403%,
after earlier touching its lowest level since March 3 at 1.358%.

 (Reporting by Fergal Smith
Editing by Mark Heinrich, William Maclean)
  
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