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Canadian dollar gains 0.3% against greenback
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Price of U.S. oil settles 0.8% higher
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Canadian factory activity rises to 7-month high
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Canadian bond yields move higher across curve
(Adds analyst quotes, details throughout; updates prices)
By Fergal Smith
TORONTO, March 1 (Reuters) - The Canadian dollar
strengthened against its U.S. counterpart on Wednesday,
recovering from an earlier five-day low, as China's
manufacturing purchasing managers' index (PMI) rose to its
highest level in more than a decade, boosting commodity prices.
The loonie was trading 0.3% higher at 1.36 to the
U.S. dollar, or 73.53 U.S. cents, after touching its weakest
intraday level since Friday at 1.3659.
"It has been at the mercy of oil volatility," said Erik
Bregar, director of FX and precious metals risk management at
Silver Gold Bull. "It's found a lot of support from the really
good PMIs out of China."
The price of oil , one of Canada's major exports,
settled 0.8% higher at $77.69 a barrel as China's manufacturing
activity expanded at its fastest pace since April 2012. China is
a major importer of oil.
Canadian manufacturing activity also expanded at a faster
pace in February. The S&P Global Canada Manufacturing Purchasing
Managers' Index (PMI) rose to a seasonally adjusted 52.4 in
February from 51.0 in January, posting its highest level since
July.
The gain for the loonie came as the U.S. dollar fell
against a basket of major currencies after regional German
inflation data signaled price pressures remain high, boosting
the euro .
Still, the loonie has fallen about 2% from its strongest
level in February.
"The trend is not really friendly for CAD right now," Bregar
said. "Today is a nice bounce, but we need to see more to get
momentum behind CAD."
Canadian government bond yields rose across the curve,
tracking the move in U.S. Treasuries. The 10-year was up 7.8 basis points at 3.416%, moving closer to the
three-month high it touched on Monday at 3.465%.
(Reporting by Fergal Smith; Editing by Tomasz Janowski and Paul
Simao)
