* Canadian dollar weakens 0.1% against the greenback
* Canadian factory activity expands at a record pace in
March
* Price of U.S. oil rises 2.4%
* Canadian bond yields ease across a flatter curve
TORONTO, April 1 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Thursday, but held on to much of
its March gains as oil rose and domestic data showed factory
activity expanding at a record pace last month.
The IHS Markit Canada Manufacturing Purchasing Managers'
index (PMI) rose to a seasonally adjusted 58.5 in March from
54.8 in February, posting the highest reading in the 10-year
history of the survey.
Separate data from Statistics Canada showed that the value
of building permits rose by 2.1% in February from a month
earlier, beating expectations of a 1.4% decline.
U.S. crude prices were up 2.4% at $60.56 a barrel on
optimism about economic recovery and hopes that OPEC and its
allies will keep production curbs in place, while U.S. President
Joe Biden's sweeping $2.3 trillion plan to rebuild America's
crumbling infrastructure helped boost stock markets globally
.
The Canadian dollar was trading 0.1% lower at 1.2575
to the greenback, or 79.52 U.S. cents, having traded in a range
of 1.2556 to 1.2602. In March, the loonie advanced 1.4%, while
it was also up 1.4% for the first quarter, the best performance
among G10 currencies.
Analysts have raised their Canadian dollar forecasts for the
coming year, expecting the currency to benefit from faster
growth in the domestic economy and a potential reduction by the
Bank of Canada of its bond purchases, a Reuters poll showed.
Still, Canada is facing a potential third wave of COVID-19
infections. Ontario, the country's most populous province, will
enter another lockdown on the weekend for 28 days, local media
reported.
Canadian government bond yields fell across a flatter curve
in sympathy with U.S. Treasuries. The 10-year was
down 4.3 basis points at 1.517%.
(Reporting by Fergal Smith; Editing by Kirsten Donovan)
Read More
