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CANADA FX DEBT-C$ rebounds from 2-year low as Wall Street rallies


        *
      Canadian dollar strengthens 0.2% against the greenback


        *
      Loonie trades in a range of 1.3641 to 1.3741


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      Price of U.S. oil rises 2.3%


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      Canadian bond yields rise across steeper curve



       TORONTO, Sept 27 (Reuters) - The Canadian dollar
strengthened against the greenback on Tuesday as some calm
returned to global financial markets after they were buffeted by
the recent surge in bond yields, with the currency rebounding
from a two-year low the day before.
    The loonie        was trading 0.2% higher at 1.37 to the
U.S. dollar, or 72.99 U.S. cents, after trading in a range of
1.3641 to 1.3741. On Monday, it touched its weakest intraday
level since May 2020 at 1.3808.
    The U.S. dollar        took a pause in what has been a
relentless climb higher, while Wall Street and the price of oil,
one of Canada's major exports, rallied. U.S. crude        prices
were up 2.3% to $78.50 a barrel.
    Investors have worried that higher borrowing costs could tip
some major economies into recession as central banks hike
interest rates aggressively to tackle inflation.
    Inflation is too high in Canada, so the Bank of Canada needs
to increase interest rates to slow spending and give the economy
time to catch up, Governor Tiff Macklem said on Monday.

    The BoC has tightened by 300 basis points since March,
lifting its policy rate to a 14-year high of 3.25%. Money
markets expect rates to move up by another three-quarters of a
percentage point by the end of the year.
    Canadian GDP for July, due on Thursday, could offer further
clues on the outlook for interest rates.
    Canadian government bond yields were higher across much of a
steeper curve. The 10-year             rose 3.7 basis points to
3.264%, approaching the top of its range since July.
 (Reporting by Fergal Smith
Editing by Alistair Bell)

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