(Adds strategist quotes and details throughout; updates prices)
* Canadian dollar strengthens 0.4% against the greenback
* Loonie trades its strongest since March 22 at 1.2501
* Price of U.S. oil settles 4.6% lower
* Canadian bond yields rise across a steeper curve
By Fergal Smith
TORONTO, April 5 (Reuters) - The Canadian dollar advanced
against its broadly weaker U.S. counterpart on Monday as robust
U.S. economic data bolstered investor sentiment and ahead of a
potential reduction by the Bank of Canada of its bond purchases
later this month.
The loonie was trading 0.4% higher at 1.2521 to the
greenback, or 79.87 U.S. cents, having touched its strongest
intraday level since March 22 at 1.2501.
"I think we stay relatively well supported, at least until
we get some sense of what the Bank of Canada is thinking later
in the month," said Shaun Osborne, chief currency strategist at
Scotiabank.
Strategists from Canada's six largest banks expect the
central bank to announce at its interest rate decision on April
21 that it is cutting the amount of bonds it buys each week to
C$3 billion from C$4 billion.
If the BoC were to reduce its bond purchases, it could
"balance that out with some sort of dovish messaging that says
that rates aren't going to move up anytime soon," Osborne said.
Speculators have raised their bullish bets on the Canadian
dollar, data from the U.S. Commodity Futures Trading Commission
showed on Friday. As of March 30, net long positions had
increased to 6,518 contracts from 5,103 in the prior week.
Wall Street's main indexes climbed, with the S&P 500 and the
Dow posting record highs as investors cheered strong jobs and
services sector reports. Canada sends about 75% of its exports
to the United States, including oil.
U.S. crude oil futures settled 4.6% lower at $58.65 a
barrel, pressured by rising supply from OPEC+ and higher Iranian
output, while the U.S. dollar gave back some recent gains
against a basket of major currencies.
Canadian government bond yields were higher across a steeper
curve, with the 10-year up nearly 5 basis points at
1.562%.
(Reporting by Fergal Smith; Editing by Nick Zieminski and Peter
Cooney)
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