* Canadian dollar strengthens 0.2% against the greenback
* Loonie touches its highest level since February 2018 at
1.2252
* Toronto home sales fall nearly 13% in April from March
* Canadian 10-year yield was little changed at 1.521%
By Fergal Smith
TORONTO, May 5 (Reuters) - The Canadian dollar strengthened
to its highest level in more than three years against its U.S.
counterpart on Wednesday, supported by improved investor
sentiment and the Bank of Canada's recent shift to more hawkish
guidance.
The Dow Jones Industrial Average hit a record high as
the market recovered from a steep tech sell-off, after investors
were encouraged by U.S. Treasury Secretary Janet Yellen's new
comments on interest rates and a positive private jobs report.
"Risk-on conditions" and the recent move higher in commodity
prices bolstered the Canadian dollar," Ronald Simpson, managing
director, global currency analysis at Action Economics, said in
a note. "In addition, the BoC's tapering of its QE program
appears to have shifted USD-CAD's trading range down a notch."
Last month, the Bank of Canada cut the pace of its bond
purchases and signaled it could hike interest rates in late
2022.
Further clues to the central bank's policy outlook could
come from Canada's April employment report, due for release on
Friday.
The Canadian dollar was trading 0.2% higher at 1.2280
to the greenback, or 81.43 U.S. cents, having touched its
strongest intraday level since February 2018 at 1.2252.
U.S. crude oil futures settled 0.1% lower at $65.63 a
barrel as traders used weekly inventory figures as an excuse to
pull back from the recent rally. Oil is one of Canada's major
exports.
Home sales in Toronto, Canada's most populous city, fell
nearly 13% in April from March. That bucked the regular spring
trend, as demand began to ease after months of blistering
growth.
Canadian government bond yields were mixed across the curve,
with the 10-year little changed at 1.521%.
(Reporting by Fergal Smith; Editing by Kirsten Donovan and Nick
Zieminski)
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