CANADA FX DEBT-Canadian dollar pulls back from 7-month high on importer hedging

By Fergal Smith

TORONTO, May 27 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Tuesday as the greenback notched broad-based gains and importers took advantage of recent market moves to lock in prices at better levels.

The loonie CAD= was trading 0.4% lower at 1.3790 per U.S. dollar, or 72.52 U.S. cents, extending its pullback from a seven-month intraday high that it touched on Monday at 1.3684.

"After the U.S. holiday, we're seeing the U.S. dollar bounce back across the board," said Darren Richardson, chief operating officer at Richardson International Currency Exchange Inc.

The U.S. dollar .DXY strengthened against a basket of major currencies as Japan's long-dated bond yields fell and data showed improving U.S. consumer confidence. U.S. financial markets were closed on Monday for a public holiday.

"We saw some hedging (by importers), people locking into that price so as to avoid any future uncertainty that we could see with tariffs coming up in the next couple of months," Richardson said.

The Canadian currency has recovered from a 22-year low of 1.4793 that it hit in February before Canada avoided sweeping U.S. duties on much of its goods.

The price of oil CLc1, one of Canada's major exports, was trading 1.4% lower at $60.66 a barrel on worries of a supply glut, while preliminary domestic data showed that wholesale sales decreased 0.9% in April from March.

Canada's recently elected government outlined its plans in a speech delivered by King Charles. Government debt issuance is expected to surpass a pandemic-era record high this fiscal year, which could raise borrowing costs and add to calls for the ruling Liberal Party to be more transparent on its spending plans.

Canadian government bond yields moved lower across the curve, tracking moves in U.S. Treasury yields. The 10-year CA10YT=RR was down 7.8 basis points at 3.251%.