Yahoo Finance CANADA FX DEBT-Canada dollar rebounds from 'oversold' levels as exports climb
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Canadian dollar strengthens 0.2% against the greenback
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Touches an earlier six-month low at 1.3785
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Price of U.S. oil settles 2.3% lower
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Canadian bond yields ease across curve
By Fergal Smith
TORONTO, Oct 5 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Thursday, rebounding from an earlier six-month low, as bond yields steadied for a second day and data showed Canada's trade balance swinging to a surprise surplus in August.
The loonie was trading 0.2% higher at 1.3715 to the greenback, or 72.91 U.S. cents after earlier touching its weakest intraday level since March 24 at 1.3785.
"I would say Canadian dollar underperformance over the last week was largely attributed to the steep drop in oil prices and the strong move in the U.S. dollar overall," said Rahim Madhavji, president at Knightsbridge Foreign Exchange.
"Today, we are seeing a little bit of a reversal ... It feels like the Canadian dollar was largely oversold."
The U.S. dollar gave back some recent gains against a basket of major currencies and Treasury yields eased, ahead of the release of key U.S. jobs data on Friday that could help determine whether the Federal Reserve hikes interest rates again next month.
Canadian employment data is also due for release on Friday. Data on Thursday showed that Canada posted a C$718 million ($521.88 million) trade surplus in August as exports posted solid gains a month after labor strikes shut down ports on the West Coast.
Analysts are sticking to their bullish forecasts on the Canadian dollar for the coming year, maintaining that the currency is undervalued and could benefit from Canada's close economic ties with the United States, a Reuters poll found.
The price of oil, one of Canada's major exports, extended the previous session's sharp decline. U.S. crude oil futures settled 2.3% lower at $82.31 a barrel.
Canadian bond yields fell across the curve, tracking moves in U.S. Treasuries. The 10-year was down 1.7 basis points at 4.136%, after touching on Tuesday a 16-year high at 4.292%. (Reporting by Fergal Smith; Editing by Cynthia Osterman)
