CANADA FX DEBT-Canadian dollar strengthens as domestic data lends support

The Canadian dollar strengthened against its U.S. counterpart on Wednesday as the greenback posted broad-based declines and recent domestic data lent support to the loonie.

The loonie CAD= was trading 0.3% higher at 1.4025 per U.S. dollar, or 71.30 U.S. cents, after moving in a range of 1.4015 to 1.4080.

• "We still rather think there is a case for some modest fundamental improvement in the Canadian dollar — based on stable front-end spreads and relative data surprises," Shaun Osborne and Eric Theoret, strategists at Scotiabank, said in a note.
• Canada's 2-year yield CA2YT=R was trading about 136 basis points below the equivalent U.S. rate, with the gap narrowing from 145 basis points last week.
• Canada's trade surplus hit a four-year high in June and the manufacturing sector expanded in July at the fastest pace in more than four years, data on Tuesday showed.
• Recent preliminary data has pointed to the economy growing by 3.4% in the second quarter on an annualized basis.
• Canadian employment data, due on Friday, could offer further clues on the state of Canada's economy. Analysts expect a gain of 15,000 jobs.
• The U.S. dollar .DXY edged lower against a basket of major currencies as revived hopes of an end to the war with Iran blunted safe-haven demand.
• The price of oil, one of Canada's major exports, was trading 1.4% lower at $74.75 a barrel.
• Canadian government bond yields edged higher across the curve, with the 10-year CA10YT=RR up 1.9 basis points at 3.568%.