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Canadian dollar strengthens 0.4% against greenback
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Touches strongest level since March 7 at 1.3602
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Price of U.S. oil settles 0.5% higher
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Canadian bond yields rise across flatter curve
(Adds analyst quotes and details on activity; updates prices)
By Fergal Smith
TORONTO, March 28 (Reuters) - The Canadian dollar
strengthened to a three-week high against its U.S. counterpart
on Tuesday as easing of banking sector stress reduced demand for
safe-haven assets and investors awaited the presentation of
Canada's budget.
The loonie was trading 0.4% higher at 1.3602 to the
greenback, or 73.52 U.S. cents, its strongest level since March
7.
"If there was going to be a broad run on banks it would have
happened by now," said Adam Button, chief currency analyst at
ForexLive. "The market is cautiously erasing the bank-driven
fears. You see that in CAD, oil."
Investors had worried that if financial turmoil continued,
it could lead to a severe credit crunch, worsening the economic
outlook and reducing demand for oil, one of Canada's major
exports.
U.S. crude oil futures settled 0.5% higher at $73.20
a barrel, adding to sharp gains the day before, while the
safe-haven U.S. dollar fell against a basket of major
currencies as investors' appetite for riskier currencies
increased.
Canadian Finance Minister Chrystia Freeland will present
this year's budget to parliament at around 4 p.m. EDT (2000
GMT). The document will have a major focus on scaling up
investment in clean technology and will include investments in
healthcare and help for low-income households.
Investors were also awaiting a speech by Bank of Canada
Deputy Governor Toni Gravelle on Wednesday. Money markets are
betting that the Canadian central bank will shift to cutting
interest rates this year after moving to pause its tightening
campaign earlier in March. Canadian government bond yields were higher across a flatter
curve, tracking the move in U.S. Treasuries.
The 2-year rose 9 basis points to 3.708%,
while the 10-year touched its highest since March 10
at 2.972% before dipping to 2.929%, up 3.6 basis points on the
day.
(Reporting by Fergal Smith; Editing by Paul Simao and Cynthia
Osterman)
