(Adds details throughout and updates prices)
* Loonie touches its strongest since Nov. 27 at 1.3267
* Price of U.S. oil increases by 1.7%
* Canadian productivity grows by 0.2% in the third quarter
* Canadian bond prices fall across a steeper yield curve
By Fergal Smith
TORONTO, Dec 4 (Reuters) - The Canadian dollar strengthened
to a two-week high against the greenback on Wednesday as
investors cut bets that the Bank of Canada would ease interest
rates over the coming months after upbeat comments by the
central bank on the global economy.
The Bank of Canada held its overnight rate at 1.75% as
expected and cited early signs the global economy was
stabilizing, while stressing that uncertainty caused by trade
wars remained the main threat to its outlook. [nL1N28D1SW]
"It reads fairly constructively," said Andrew Kelvin, chief
Canada strategist at TD Securities. "They do bring the trade
tensions into the first paragraph (of the policy statement), but
that follows them suggesting that the global economy is
Chances of an interest rate cut by March fell to about 20%
from 35% before the rate decision, data from the overnight index
swaps market indicated.
At 10:30 a.m. (1530 GMT), the Canadian dollar was
trading 0.5% higher at 1.3234 to the greenback, or 75.56 U.S.
cents. The currency touched its strongest intraday level since
Nov. 19 at 1.3218.
The gains for the loonie came as Wall Street was boosted by
a report that the United States and China were moving closer to
signing a 'phase one' trade deal. Investors had worried that a
deal could be delayed. [nL4N28E36K]
Canada is a major exporter of commodities, including oil, so
its economy could benefit from an improved outlook for global
U.S. crude oil futures jumped 3.7% to $58.17 a barrel
ahead of an expected extension to production curbs by OPEC and
its allies, with further support from industry data showing a
larger than forecast drop in U.S. crude stockpiles. [nL4N28E0QG]
Canadian labor productivity grew by 0.2% in the third
quarter, as both hours worked and business output slowed,
Statistics Canada said. [nSCL4NEFLH]
Canada's trade report for October is due on Thursday and the
November jobs report is due on Friday.
Canadian government bond prices were lower across the yield
curve, with the two-year down 13.5 Canadian cents to
yield 1.627% and the benchmark 10-year falling 79
Canadian cents to yield 1.534%.
Canada's 2-year yield moved 3.5 basis points further above
the U.S. equivalent to a spread of 5.7 basis points in favor of
the Canadian bond.
(Reporting by Fergal Smith; Editing by Steve Orlofsky and Nick
((firstname.lastname@example.org; +1 416 941 8113;))
Keywords: CANADA FOREX/ (UPDATE 1)
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