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CANADA FX DEBT-C$ climbs to near 3-year high on bullish investor sentiment

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    * Canadian dollar strengthens 0.2% against the greenback
    * IHS Markit Canada manufacturing PMI rises to 57.9 in
December
    * Loonie touches its strongest since April 2018 at 1.2665
    * Canadian bond yields rise across a steeper curve

    By Fergal Smith
    TORONTO, Jan 4 (Reuters) - The Canadian dollar strengthened
against its U.S. counterpart on Monday as stock markets climbed
globally and domestic data showed factory activity expanding in
December at its fastest pace on record, with the currency adding
to its 2020 gains.
    The loonie        was trading 0.2% higher at 1.2706 to the
greenback, or 78.70 U.S. cents, having touched its strongest
intraday level since April 2018 at 1.2665. It was up 2% last
year.
    "Firm commodity prices, risk appetite and the better than
expected run of Canadian data reports ahead of the break have
all helped lift the CAD (Canadian dollar)," said Shaun Osborne,
chief currency strategist at Scotiabank.    
    World stock markets          notched record highs and the
price of oil, one of Canada's major exports, was up 0.4% at
$48.69 a barrel.                             
    The U.S. dollar fell to mid-2018 lows against a basket of
major currencies as bullish sentiment across global markets
prompted investors to buy riskier currencies such as the Chinese
yuan and the euro.             
    The IHS Markit Canada Manufacturing Purchasing Managers'
index (PMI) rose to a seasonally adjusted 57.9 in December from
55.8 in November as new orders and production climbed, while
manufacturers grew more optimistic that output would continue to
rise in 2021.               
    Canada's employment report for December is due on Friday.
    Canadian government bond yields were higher across a steeper
curve in sympathy with U.S. Treasuries. The 10-year yield
            was up 2 basis points at 0.695%.

 (Reporting by Fergal Smith; editing by Emelia Sithole-Matarise)
  

Our Standards: The Thomson Reuters Trust Principles.

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