CANADA FX DEBT-Canadian dollar notches 9-day high on tariff reprieve hopes

By Fergal Smith

TORONTO, March 6 (Reuters) - The Canadian dollar strengthened to a nine-day high against its U.S. counterpart on Thursday as Canada's trade surplus widened more than expected and investors weighed prospects of additional reprieves from U.S. tariffs on Canadian goods.

The loonie CAD= was trading 0.3% higher at 1.4290 to the U.S. dollar, or 69.98 U.S. cents, after touching its strongest intraday level since February 25 at 1.4243.

U.S. Commerce Secretary Howard Lutnick said the one-month reprieve on hefty tariffs on goods imported from Mexico and Canada that has been granted to automotive products is likely to be extended to all products that comply with the U.S.-Mexico-Canada Agreement on trade.

U.S. President Donald Trump said Mexico will not be required to pay tariffs on any goods that fall under the USMCA until April 2, but made no mention of a reprieve for Canada.

"As soon as that Lutnick quote came out we dropped almost a penny," said Michael Goshko, senior market analyst at Convera Canada ULC. "I think the Whitehouse panicked because it was going to hurt their constituency."

Canada sends about 75% of its exports to the United States, including cars and oil. The nation's trade surplus rose to C$4 billion in January as fears of tariffs from the U.S. pushed exports of cars and energy products higher.

The price of oil CLc1 fell nearly 1% to $65.66 a barrel, weighed by the prospect of disruptions to global trade and OPEC+ plans to raise output.

Canadian bond yields moved higher across the curve. The 10-year CA10YT=RR was up 8.7 basis points at 3.056%, extending its rebound from a near two-year low on Tuesday at 2.796%.