Canadian dollar dips as greenback turns broadly higher

By Fergal Smith

TORONTO (Reuters) - The Canadian dollar turned lower against its U.S. counterpart on Monday as the greenback broadly rose and U.S. stocks pared their earlier gains.

At 4 p.m. EDT (2000 GMT), the Canadian dollar was trading 0.1 percent lower at C$1.2805 to the greenback, or 78.09 U.S. cents. The currency traded in a range of C$1.2750 to C$1.2807.

"It's just a (U.S.) dollar positive end to the day," said David Bradley, director of foreign exchange trading at Scotiabank. "Everything just turned mid-morning."

The U.S. dollar was boosted by higher U.S. Treasury yields. It erased earlier losses to rise against a basket of major currencies.

Wall Street ended a choppy session slightly higher after U.S. President Donald Trump's conciliatory remarks toward China's ZTE Corp helped calm U.S.-China trade tensions.

Canada's commodity-linked currency tends to be sensitive to movement in stocks due to the signal that stocks send about prospects for global growth.

The price of oil, one of Canada's major exports, rose as OPEC reported that the global oil glut has been virtually eliminated. U.S. crude oil futures settled 0.4 percent higher at $70.96 a barrel.

On Friday, the loonie reached a three-week high at C$1.2730 but was then pressured by domestic data showing a surprise April jobs decline.

Canadian home prices rose slightly in April but the rate of appreciation continued to decelerate amid softening sales and higher interest rates. The Teranet-National Bank Composite House Price Index, which measures changes for repeat sales of single-family homes, showed prices increased 0.2 percent on a monthly basis after a flat month in March.

Trump administration demands in North American Free Trade Agreement negotiations meant to push auto jobs back to the United States may not be enough to spark a shift in where automakers build cars and trucks.

Canada sends about 75 percent of its exports to the United States so its economy could benefit if a NAFTA deal is reached.

Canadian government bond prices were lower across a steeper yield curve, with the two-year price down 4.5 Canadian cents to yield 1.99 percent and the benchmark 10-year falling 37 Canadian cents to yield 2.421 percent.

The 10-year yield touched its highest intraday since May 2014 at 2.426 percent.

(Reporting by Fergal Smith; Editing by Nick Zieminski and Tom Brown)