CANADA’S EXCHANGE DEBT – Canadian dollar gains as trade balance moves into surplus

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    * Canadian dollar rises 0.2% against the greenback
    * Canada posts a trade surplus of C$3.2 billion in June
    * Price of U.S. oil increases 0.2%
    * Canadian bond yields rise across the curve

    TORONTO, Aug 5 (Reuters) - The Canadian dollar strengthened
against its U.S. counterpart on Thursday as oil prices rose and
data showed Canada's exports increasing sharply in June, with
the currency clawing back some of its decline over the past
week.
    The loonie        was trading 0.2% higher at 1.2514 to the
greenback, or 79.91 U.S. cents, after trading in a range of
1.2494 to 1.2547.
    Since last Thursday, the loonie has weakened 0.6% along with
lower prices for oil, one of Canada's major exports.
    U.S. crude        prices were up 0.2% at $68.29 a barrel,
but stayed near a two-week low as concern that surging COVID-19
cases in some countries would reduce demand offset the market
impact of rising Middle East tensions.             
    Canada unexpectedly posted a trade surplus of C$3.2 billion
in June, the largest in almost 13 years, as exports jumped 8.7%
on higher shipments of oil and autos, Statistics Canada data
indicated.              
    Canada's jobs report for July is due on Friday which can
offer clues on the Bank of Canada policy outlook. Analysts
expect the data to show employment rising by 177,500 as
pandemic-related economic restrictions eased.
    Analysts have raised their forecasts for the Canadian dollar
over the coming year, expecting the Bank of Canada to begin
interest rate hikes before the Federal Reserve and the domestic
economy to benefit from a high rate of COVID-19 vaccinations.
                
    Canadian government bond yields were higher across the
curve, tracking the move in U.S. Treasuries.
    The 10-year             rose 1.3 basis points to 1.148%,
after hitting on Wednesday its lowest intraday level in nearly
six months at 1.078%.

 (Reporting by Fergal Smith; editing by Barbara Lewis)
  


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