Canadian dollar steadies ahead of large option expiries

By Fergal Smith

TORONTO (Reuters) - The Canadian dollar was little changed against its broadly stronger U.S. counterpart on Thursday as oil prices rose and traders managed their positions in advance of large option expiries.

The loonie was trading nearly unchanged at 1.37 to the U.S. dollar, or 72.99 U.S. cents, after touching its strongest intraday level since June 12 at 1.3685.

"It's kind of stuck in the mud here because of this large option expiry tomorrow," said Erik Bregar, director, FX & precious metals risk management, at Silver Gold Bull. "We are seeing dealer hedging around that event."

Canadian dollar options with a notional value of $1.2 billion and strikes between 1.3710 and 1.3720 are due to expire on Friday.

The U.S. dollar rose against a basket of major currencies as French political uncertainty weighed on the euro, while the price of oil, one of Canada's major exports, climbed to a seven-week high. U.S. crude oil futures were up 0.7% at $82.15 a barrel.

Canadian retail sales data for April, due on Friday, could offer clues on the strength of the domestic economy. Economists expect an increase in sales of 0.7% from March.

Canadian bond yields moved higher across the curve, tracking moves in U.S. Treasuries. The 10-year was up 4.4 basis points at 3.339%, extending its rebound from a four-month low on Tuesday at 3.258%.

(Reporting by Fergal Smith; Editing by Leslie Adler)