CANADA FX DEBT-Canadian dollar gains as rebound in sentiment holds up

CANADA FX DEBT-Canadian dollar gains as rebound in sentiment holds up
 (Adds analyst quote and details throughout, updates prices)
    * Canadian dollar strengthens 0.2% against the greenback
    * Price of U.S. oil settles 0.2% lower
    * Canadian bond yields rise across a steeper curve

    By Fergal Smith
    TORONTO, July 26 (Reuters) - The Canadian dollar edged
higher against its broadly weaker U.S. counterpart on Monday, as
a recovery in risk appetite remained intact following a recent
wobble and investors looked ahead to a Federal Reserve meeting
this week.
    The loonie        was trading 0.2% higher at 1.2540 to the
greenback, or 79.74 U.S. cents. It has rebounded from a 5-month
low at 1.2807 last Monday, when investors were rattled by the
spread of the Delta variant of the coronavirus.
    "The recuperation in investors' spirits should curtail the
Canadian dollar's downside potential, and at the same time put a
lid on the (U.S.) dollar," analysts at Action Economics said in
a note.
    The S&P 500 eked out another record closing high, while the
safe-haven U.S. dollar        fell against a basket of major
currencies. Still, caution ahead the Fed interest rate decision
on Wednesday kept the market in check.                         
    Oil        settled 0.2% lower at $71.91 a barrel but copper
        climbed to a 6-week high, with floods in top consumer
China sparking demand hopes at a time when inventories were
falling. Canada is a major exporter of both commodities.
    The Canadian Consumer Price Index Report for June is set for
release on Wednesday. The data will include updated weights for
the basket of goods and services in the index, with shifts
including a higher weighting for the shelter component as
housing prices soar.             
    Canadian government bond yields were higher across a steeper
curve. The 10-year             rose 1.6 basis points to 1.223%,
after hitting last Tuesday a 5-month low at 1.104%.

 (Reporting by Fergal Smith; Editing by Andrea Ricci and Sandra

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