CANADA FX DEBT-Canadian dollar strengthens as global risk aversion subsides
* Canadian dollar rises 0.2% against the greenback
* Loonie trades in a range of 1.3156 to 1.3212
* Price of U.S. oil increases 0.4%
* Canadian bond yields ease across much of a flatter curve
TORONTO, Oct 27 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Tuesday as stocks and oil prices rose, with the currency rebounding from a 10-day low the day before when a wave of risk aversion swept global markets.
Wall Street's main indexes were set to bounce following the benchmark S&P 500's worst day in a month as investors parsed through a deluge of corporate earnings, while bracing for volatility ahead of Election Day.
Canada runs a current account deficit and is a major producer of commodities, including oil, so the loonie tends to be sensitive to investor risk appetite.
U.S. crude oil futures were up 0.4% at $38.7 a barrel as oil companies shut down some U.S. Gulf of Mexico oil output due to a hurricane, although surging coronavirus infections and rising Libyan supply limited gains.
The Canadian dollar was trading 0.2% higher at 1.3176 to the greenback, or 75.90 U.S. cents, having traded in a range of 1.3156 to 1.3212. On Monday, the currency touched its weakest intraday level since Oct. 16 at 1.3225.
The Bank of Canada is due to make an interest rate decision and update its economic outlook on Wednesday. The central bank has said it will leave rates at a record low of 0.25% until its 2% inflation target is achieved sustainably, which it does not expect for at least two years.
Canadian government bond yields were lower across much of a flatter curve in sympathy with U.S. Treasuries. The 10-year fell nearly 1 basis point to 0.620%, having pulled back from an eight-week high on Friday at 0.680%. (Reporting by Fergal Smith Editing by Nick Zieminski) ((firstname.lastname@example.org; +1 647 480 7446;)) Keywords: CANADA FOREX/
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