CANADA FX DEBT-Canadian dollar hits 2-week high as Fed stance bolsters sentiment

       * Canadian dollar strengthens 0.5% against the greenback
    * Loonie touches its strongest level since July 14 at 1.2451
    * Price of U.S. oil increases 0.7%
    * Canadian bond yields rise across a steeper curve

    By Fergal Smith
    TORONTO, July 29 (Reuters) - The Canadian dollar touched a
two-week high against its broadly weaker U.S. counterpart on
Thursday, as the Federal Reserve remained patient about reducing
stimulus and the Bank of Canada reassured Canadians it would
keep inflation under control.
    The U.S. dollar        slipped to a one-month low against a
basket of major currencies after the U.S. Fed's reassurance that
interest rate hikes remain distant.
    "The Fed continued to support markets yesterday with upbeat
talk on the economy but not committing to cutting stimulus in
the near term," Colin Cieszynski, chief market strategist at SIA
Wealth Management, said in a note.
    Canada sends about 75% of its exports to the United States
including oil. Oil prices rose as crude stockpiles in the United
States, the world's top oil consumer, fell to their lowest since
January 2020.
    U.S. crude        prices were up 0.7% at $72.87 a barrel,
while the Canadian dollar        gained 0.5% to 1.2469 per
greenback, or 80.20 U.S. cents. It touched its strongest
intraday level since July 14 at 1.2451.
    Bank of Canada Governor Tiff Macklem, writing in a column
for the Financial Post newspaper, said Canadians can be
confident that the cost of living will not rise out of control
as the economy reopens from the COVID-19 pandemic.
    Data on Wednesday showed that Canada's inflation rate slowed
to 3.1% in June from a decade-high 3.6% in May, but more price
increases could be coming as businesses shuttered during the
COVID-19 pandemic reopen and consumers dip into record savings.

    Canadian government bond yields were higher across a steeper
curve, with the 10-year             up 3.6 basis points at
1.206%.

 (Reporting by Fergal Smith; Editing by Susan Fenton)

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