CANADA FX DEBT-Canadian dollar hits 2-week high, boosted by 'non-hawkish' Fed

    (Adds strategist quotes and details throughout; updates prices)
    * Canadian dollar strengthens 0.7% against the greenback
    * Loonie touches strongest level since July 14 at 1.2432
    * Price of U.S. oil settles 1.7% higher
    * Canadian 10-year yield rises 3.3 basis points

    By Fergal Smith
    TORONTO, July 29 (Reuters) - The Canadian dollar rose to 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 loonie        was trading 0.7% higher at 1.2438 to the
greenback, or 80.40 U.S. cents. It touched its strongest
intraday level since July 14 at 1.2432.
    The U.S. dollar        has fallen sharply over the last 24
hours "in the wake of a non-hawkish Fed and moves by China to
shore up market confidence," said Greg Anderson, global head of
foreign exchange strategy at BMO Capital Markets in New York.
"Commodity currencies have fared particularly well."
    On Wednesday, the U.S. central bank said the job market
still had "some ground to cover" before it would be time to ease
monetary stimulus.
    Among Group of Ten currencies, only the Norwegian crown
       and the New Zealand dollar        gained more ground than
the loonie. Norway, like Canada, is a major producer of oil,
which settled 1.7% higher at $73.62 a barrel.
    Canada's foreign exchange fundamentals, including economic
growth and the coronavirus vaccination rate "are at the top of
the G10 pack and CAD performance should reflect that," Anderson
said. "Even after today's gains, I still think CAD should rally
further over the next few weeks."
    In a column published by the Financial Post newspaper, Bank
of Canada Governor Tiff Macklem said Canadians can be confident
that the cost of living will not rise out of control as the
economy reopens from the pandemic.
    Data on Wednesday showed that Canadian inflation slowed from
a decade-high, but more price increases could be coming as
businesses reopen and consumers dip into record savings.

    Canadian government bond yields rose across a steeper curve,
with the 10-year             up 3.3 basis points at 1.203%.

 (Reporting by Fergal Smith; Editing by Susan Fenton and Paul
Simao)

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