CANADA FX DEBT-Canadian dollar gains as exporters lock in rates at favorable levels

By Fergal Smith

TORONTO, Sept 29 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Monday as the greenback gave back some of its recent broad-based gains, but the loonie's move was limited as oil prices tumbled.

The loonie CAD= was trading 0.2% higher at 1.3912 per U.S. dollar, or 71.88 U.S. cents, after trading in a range of 1.3904 to 1.3947. On Friday, it touched a four-month intraday low of 1.3958.

"It looks like we're seeing a bit of profit-taking" by speculators that were short the Canadian dollar, said Darren Richardson, chief operating officer at Richardson International Currency Exchange Inc.

Canadian exporters taking advantage of recent gains in the U.S. dollar to lock in currency rates at favorable levels has added to support for the loonie, Richardson said.

The U.S. dollar .DXY fell against a basket of major currencies following a rally last week that was driven by stronger-than-expected U.S. economic data. The U.S. nonfarm payrolls report, due on Friday, could offer further clues on the state of the U.S. economy and prospects for additional Federal Reserve interest rate cuts.

Investors have raised bearish bets on the Canadian dollar to the highest level since April, data from the U.S. Commodity Futures Trading Commission showed on Friday. The net short position in the currency was at 114,806 contracts as of September 23, up from 107,177 1090741NNET.

The price of oil CLc1 settled 3.45% lower at $63.45 a barrel on Monday on expectations that OPEC+ will approve another increase to crude oil production at its meeting on Sunday.

Canadian government bond yields moved lower across a flatter curve, tracking moves for U.S. Treasuries. The 10-year CA10YT=RR was down 4.3 basis points at 3.185%.