CANADA FX DEBT-C$ retains much of weekly gain as U.S. inflation cools
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Canadian dollar weakens 0.1% against the greenback
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Price of U.S. oil rises 1.7%
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10-year yield touches a 2-week high at 2.932%
TORONTO, Jan 27 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Friday but held near its strongest level in over two months as oil prices rose and U.S. data added to evidence of easing inflation pressures.
The loonie was trading 0.1% lower at 1.3335 to the greenback, or 74.99 U.S. cents, after touching on Thursday its strongest intraday level since Nov. 18 at 1.3298.
For the week, the currency was on track to advance 0.3% as equity markets and the price of oil, one of Canada's major exports, climbed.
U.S. crude prices were up 1.7% at $82.36 a barrel on Friday, buoyed by better than expected U.S. economic growth as well as strong middle distillate refining margins and hopes of a rapid recovery in Chinese demand.
U.S. consumer spending fell in December, putting the economy on a lower growth path heading into 2023, while inflation continued to subside, which could give the Federal Reserve room to further slow the pace of its interest rate hikes next week.
On Wednesday, the BoC raised its key interest rate to a 15-year high of 4.5% and signaled a pause in its tightening campaign.
Canadian government bond yields were higher across a steeper curve, tracking the move in U.S. Treasuries.
The 10-year touched its highest level since Jan. 13 at 2.932% before dipping to 2.917%, up 5.1 basis points on the day. (Reporting by Fergal Smith; Editing by Kirsten Donovan)
