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Canadian dollar gains 0.3% against the greenback
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Trades in a range of 1.3535 to 1.3624
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2-year yield touches a 15-year high at 4.340%
(New throughout, updates prices, market activity and strategist
comments)
By Fergal Smith
TORONTO, Feb 27 (Reuters) - The Canadian dollar
strengthened against its U.S. counterpart on Monday, with the
currency clawing back some recent declines as equity markets
rebounded and ahead of GDP data this week that could guide
expectations for the Bank of Canada.
The loonie was up 0.3% at 1.3575 to the greenback, or
73.66 U.S. cents, after trading in a range of 1.3535 to 1.3624.
On Friday, it touched a seven-week low at 1.3665.
"I suspect that we are consolidating after a pretty rough
week last week," said Bipan Rai, global head of FX strategy at
CIBC Capital Markets.
"It wouldn't surprise me for USD-CAD if we spent the next
little while consolidating close to the 1.3550 to 1.3700 range."
U.S. stocks rose as investors hunted for bargains after the
main benchmarks logged sharp declines last week on worries that
monetary policy would be tighter than previously thought, while
the safe-haven U.S. dollar gave back some recent gains against a
basket of major currencies.
Canadian gross domestic product data for the fourth quarter,
due on Tuesday, is expected to show that the economy grew at an
annualized rate of 1.5%. December GDP data is also due which
could include an advanced estimate for January.
Recent employment and manufacturing data as well as
preliminary estimates for retail sales and wholesale trade have
showed that the economy remained robust at the start of the
year.
"How the market treats that (January advanced estimate)
could be interesting for dollar-Canada," Rai said, adding that
it could lead to the market pricing in a higher endpoint for
Bank of Canada interest rate hikes.
Canadian government bond yields were mixed across the curve.
The 2-year touched its highest level since October
2007 at 4.340% before dipping to 4.268%, down 1.6 basis points
on the day.
(Reporting by Fergal Smith
Editing by Bernadette Baum and David Gregorio)
