CANADA FX DEBT-Canadian dollar hits 10-day high as speculators turn bullish

By Fergal Smith

TORONTO, Feb 9 (Reuters) - The Canadian dollar strengthened to a 10-day high on Monday against its U.S. counterpart, which posted broad declines, after data showed that speculators were net-bullish on the loonie for the first time in two and a half years.

The Canadian dollar CAD= was trading 0.8% higher at 1.3565 per U.S. dollar, or 73.72 U.S. cents, after touching its strongest intraday level since January 30 at 1.3560.

"The loonie is finding support from resilient January labour market data," said Tony Valente, senior FX dealer at AscendantFX.

Canada unexpectedly lost 24,800 jobs in January but the losses were all part-time, and the unemployment rate dipped to a 16-month low of 6.5%, data on Friday showed. The data is unlikely to encourage the Bank of Canada to cut interest rates further, analysts say.

"Broader USD softness is also contributing to the move, with speculative positioning turning increasingly bearish on the USD," Valente said.

The U.S. dollar .DXY fell against a basket of major currencies following a report that Chinese regulators have advised financial institutions to curb their exposure to U.S. Treasury bonds.

Speculative positioning has turned net-long the Canadian dollar for the first time since August 2023, data from the U.S. Commodity Futures Trading Commission showed on Friday. 1090741NNET

Non-commercial net-long positions stood at 2,130 contracts as of February 3, swinging from net-short 16,046 contracts in the week before.

The price of oil CLc1, one of Canada's major exports, rose 1.4% to $64.44 a barrel on renewed concerns that tensions between the U.S. and Iran could lead to oil supply disruptions.

Canadian bond yields edged lower across the curve, with the 10-year CA10YT=RR down 1.6 basis points at 3.394%.