(Adds dealer quote and details throughout; updates prices)
* Loonie trades in a range of 1.2266 to 1.2317
* Price of U.S. oil settles 1.4% higher
* Canadian factory activity grows for the 10th straight
month
* Canada's 10-year yield eases 1.6 basis points to 1.530%
By Fergal Smith
TORONTO, May 3 (Reuters) - The Canadian dollar rose against
its U.S. counterpart on Monday, approaching a three-year high,
supported by domestic data showing factory activity growing in
April and the Federal Reserve's message that it is too early to
dial back stimulus.
The U.S. economy is poised to grow at the fastest rate in
decades but conditions are still not nearly strong enough for
the Fed to consider pulling back its support, New York Fed Bank
President John Williams said.
"The dovish comments really produce a lot of market
confidence," said Darren Richardson, chief operating officer at
Richardson International Currency Exchange Inc. "That free money
gives the market room to expand, so that's going to help
commodity currencies like the Canadian dollar."
The Fed's benchmark interest rate is currently set at near
zero, as is the Bank of Canada's.
Last month's signal from Canada's central bank that it may
begin raising interest rates before the Fed has lit a fire under
the Canadian dollar, but past tightening cycles show faster
liftoff may not be sustained, particularly if the loonie
overshoots.
The Canadian dollar was trading 0.1% higher at 1.2272
to the greenback, or 81.49 U.S. cents, having traded in a range
of 1.2266 to 1.2317. On Friday, it touched its strongest
intraday level since February 2018 at 1.2262.
Canadian manufacturing activity grew for the 10th straight
month in April as production and new orders climbed, with the
pace easing only slightly from the previous month's record
level, data showed.
Global equity markets were not far from a record
and the price of oil, one of Canada's major exports, settled
1.4% higher at $64.49 a barrel.
The U.S. dollar fell against a basket of currencies
as Treasury yields retreated. Canada's 10-year yield
fell 1.6 basis points to 1.530%.
(Reporting by Fergal Smith; Editing by Jonathan Oatis and Peter
Cooney)
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