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CANADA FX DEBT-C$ rallies as bond yields tumble on surprise BoE move

    (Adds analyst quotes and details throughout; updates prices)

        *
      Canadian dollar rises 0.7% against the greenback


        *
      Touches its weakest intraday since May 2020 at 1.3832


        *
      Price of U.S. oil settles 4.7% higher


        *
      10-year yield tumbles 26 basis points



    By Fergal Smith
       TORONTO, Sept 28 (Reuters) - The Canadian dollar
strengthened against its U.S. counterpart on Wednesday as the
Bank of England's move to support the bond market wrong-footed
some investors, with the currency pulling back from its weakest
level in more than two years.
    Wall Street rebounded strongly following its recent
sell-off, while U.S. Treasury yields tumbled and the U.S. dollar
      lost ground against a basket of major currencies after the
BoE said it would buy long-dated British bonds in a move aimed
at restoring financial stability.
    Markets have been rocked globally by the fiscal policy of
the new government in London.
    "This Bank of England move caught everybody off guard," said
Erik Bregar, director, FX & precious metals risk management at
Silver Gold Bull. "Because there is lots of broad dollar
selling, it's benefiting the Canadian (currency)."
    The Canadian dollar        was trading 0.7% higher at 1.3625
to the greenback, or 73.39 U.S. cents, after earlier touching
its weakest level since May 2020 at 1.3832.
    "There is still a lot of people short bonds, short equities,
long the (U.S.) dollar - all the trades that were working very
well up until today," Bregar said.
    "I wouldn't be surprised after some consolidation overnight
that what we're seeing today continues into the end of the
week."
    Adding to support for the loonie, the price of oil
settled 4.7% higher at $82.15 a barrel as U.S. fuel inventory
figures showed larger-than-expected drawdowns and a rebound in
consumer demand. Oil is one of Canada's major exports.

    The Bank of Canada said it would begin publishing a summary
of its monetary policy deliberations starting next year,
accepting a key recommendation from a transparency review by the
International Monetary Fund.
    The Canadian 10-year yield             tumbled 26 basis
points to 3.06%, after earlier touching its highest since June
28 at 3.368%.
 (Reporting by Fergal Smith, editing by Nick Zieminski and
Marguerita Choy)

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