CANADA’S FX DEBT-Canadian dollar gains as investors look past plummeting factory sales

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 (Adds details throughout and updates prices)
    * Canadian dollar strengthens 0.2% against greenback
    * Canadian factory sales decrease by 2.1% in April 
    * Price of U.S. oil settles 3 cents lower
    * Canadian 10-year yield rises 2.9 basis points to 1.397%

    By Fergal Smith
    TORONTO, June 14 (Reuters) - The Canadian dollar edged
higher against its U.S. counterpart on Monday as investors
shrugged off domestic data showing a decline in factory sales
and awaited a Federal Reserve policy decision this week, with
the loonie recouping some of Friday's decline.
    Canadian factory sales fell 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.
    Canada sends about 75% of its exports to the United States,
including oil. Supported by economic recovery, crude futures
       climbed to the highest since October 2018 at $71.78 a
barrel before settling at $70.88, down 3 cents on the day.
    The Canadian dollar       , this year's top performing G10
currency, was trading 0.2% higher at 1.2143 to the greenback, or
82.35 U.S. cents.
    On Friday, it fell to its weakest intraday level since May
14 at 1.2177, with data showing that speculators have cut their
bullish bets on the currency.
    A stronger Canadian dollar is usually perceived as 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 are looking to the Fed's meeting statement on
Wednesday for clues on when the central bank is likely to begin
paring back its unprecedented monetary stimulus.             
    Canada's 10-year yield             rose 2.9 basis points to
1.397%, tracking the move in U.S. Treasuries. Earlier in the
day, it touched its lowest level since March 3 at 1.365%.

 (Reporting by Fergal Smith; Editing by Bernadette Baum and
Cynthia Osterman)
  



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