*
Canadian dollar strengthens 0.7% against the greenback
*
Trades in a range of 1.3653 to 1.3745
*
Price of U.S. oil settles 5.1% higher
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Canadian bond yields rise sharply across curve
(Adds strategist comments and details throughout, updates
prices)
By Fergal Smith
TORONTO, March 27 (Reuters) - The Canadian dollar
strengthened against its U.S. counterpart on Monday, notching up
its biggest advance in two weeks, as signs of easing stress in
the banking sector contributed to a surge in oil prices.
The Canadian dollar was trading 0.7% higher at 1.3655
to the greenback, or 73.23 U.S. cents, its biggest gain since
March 13. It moved in a range of 1.3653 to 1.3745.
"We are seeing a recovery in sentiment but also in terms of
some of the fundamentals that would support the Canadian
dollar," said Eric Theoret, a global macro strategist at
Manulife Investment Management. "The turn in the price of crude
has really been a positive for the Canadian dollar."
Wall Street equities gained and U.S. Treasury yields rose as
investor concerns about the financial system were calmed after
First Citizens BancShares said it would take on the
deposits and loans of failed Silicon Valley Bank .
Investors had worried that stress in the banking sector
could lead to a credit crunch, worsening the economic growth and
slowing demand for oil, one of Canada's major exports.
U.S. crude oil futures settled 5.1% higher at $72.18
a barrel on hopes that banking sector issues would be contained
and after Iraq was forced to halt some crude exports from its
semi-autonomous Kurdistan region.
Canada's budget is due on Tuesday. It will introduce a
system to lock in future carbon credit prices, a move meant to
boost investments by giving businesses certainty to develop
low-carbon technologies, a senior government source with
knowledge of the document told Reuters.
Canadian government bond yields were sharply higher across
the curve, tracking the move in U.S. Treasuries. The 2-year rose 20.5 basis points to 3.632%, after touching on
Friday its lowest intraday level since August 2022 at 3.254%.
(Reporting by Fergal Smith; Editing by Andrea Ricci and Alison
Williams)
