CANADA’S FX DEBT – The Canadian dollar retreats from a 3-year high as stocks fall


* The Canadian dollar plunges 0.1% against the greenback * The loonie hits its highest level since April 2018 at 1.2580 * The price of US oil rises 1.5% * Canada’s 10-year yield hit a one-year high of 1.256% TORONTO, Feb 22 (Reuters) – The Canadian dollar fell slightly against its U.S. counterpart on Monday as rising global bond yields weighed on risk appetite, the loonie coming back from its highest level in almost three years, reached earlier in the session. Global equities fell as expectations of faster economic growth and inflation beat bonds and boosted commodities, while rising real yields made equity valuations stretched by comparison. With Canada’s current account in deficit, the loonie tends to be sensitive to risk appetite. The Canadian dollar was trading down 0.1% at 1.2625 for the greenback, or 79.21 cents US. It touched its highest intraday level since April 2018 at 1.2580. The price of oil, one of Canada’s main exports, rose as the slow return of crude oil production in the United States, reduced by freezing conditions, served as a reminder of the tight supply situation . US crude prices rose 1.5% to $60.12 a barrel. Speculators cut their bullish bets on the Canadian dollar for the second week in a row, data from the USCommodity Futures Trading Commission showed Friday. From Feb. On January 16, net long positions had fallen to 8,164 contracts from 9,528 the previous week. Bank of Canada Governor Tiff Macklem is due to speak Tuesday on the impact of the coronavirus crisis on the labor market. On Friday, Canadian health officials said strict public measures should be maintained to prevent new variants of COVID-19 from triggering a third wave of infections, just as some major provinces ease restrictions. Yields on Canadian government bonds were higher across the curve on Monday in sympathy with US Treasuries. The 10-year hit its highest since February last year at 1.256% before falling to 1.225%, up 1.2 basis points on the day. (Reporting by Fergal Smith; Editing by Steve Orlofsky)


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