* Canadian dollar strengthens 0.2% against greenback
* Canadian factory sales decrease by 2.1% in April
* Price of U.S. oil rises 0.9%
* Canadian 10-year yield rises 1.3 basis points to 1.381%
By Fergal Smith
TORONTO, June 14 (Reuters) - The Canadian dollar edged
higher against its U.S. counterpart on Monday as oil prices
climbed and investors looked past domestic data showing factory
sales falling in April, with the loonie clawing back some of
Friday's decline.
Canadian factory sales decreased by 2.1% in April from
March, Statistics Canada said. Still, sales were up 1.1% after
excluding vehicles and parts.
"Zooming out from the disruptions seen in the auto industry,
the outlook for manufacturing sales is not all that bad," Omar
Abdelrahman, an economist at TD Economics, said in a note.
"The reopening of provincial economies and strength in
Canada's largest export market (the U.S.) should provide a lift
to demand," Abdelrahman added.
The price of oil, one of Canada's major exports, was
supported by economic recovery.
U.S. crude prices rose 0.9% to $71.56 a barrel, while
the Canadian dollar was trading 0.2% higher at 1.2143 to
the greenback, or 82.35 U.S. cents. On Friday, it fell to its
weakest since May 14 at 1.2177.
Speculators have cut their bullish bets on the Canadian
dollar, the strongest G10 currency this year, data from the U.S.
Commodity Futures Trading Commission showed on Friday. As of
June 8, net long positions had fallen to 45,281 contracts from
48,772 in the prior week.
A stronger Canadian dollar is usually seen hurting
exporters, but the nature of the global economic recovery could
help firms pass on their higher costs from the currency to
customers, leaving exporters in less pain than in previous
cycles.
Investors were awaiting a Federal Reserve policy
announcement on Wednesday. Expectations that the Fed would stick
to its dovish course have helped cap U.S. and Canadian bond
yields.
Canada's 10-year yield touched its lowest level
since March 3 at 1.365% before recovering to 1.381%, up 1.3
basis points on the day.
(Reporting by Fergal Smith
Editing by Bernadette Baum)
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