CANADA FX DEBT-Canadian dollar notches 3-week high on improving risk appetite

(Adds dealer quotes and details throughout; updates prices)

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Canadian dollar rises 0.7% against the greenback

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Price of U.S. oil settles 0.9% higher

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Canadian bond yields ease across flatter curve

TORONTO, Oct 25 (Reuters) – The Canadian dollar rose to
its highest level in nearly three weeks against its U.S.
counterpart on Tuesday as investment sentiment continued to
recover, but the move was limited ahead of a Bank of Canada
(BoC) interest rate decision.

Wall Street’s main indexes moved higher for a third day as
U.S. Treasury yields dropped amid growing bets of a let-up in
the pace of Federal Reserve interest-rate hikes on more signs of
a cooling economy.

Stocks globally have been hammered this year by the rapid
pace of central bank tightening to subdue inflation.

The price of oil, one of Canada’s major exports, was lifted
by a weaker U.S. dollar and supply concerns highlighted
by Saudi Arabia’s energy minister. U.S. crude oil futures
settled 0.9% higher at $85.32 a barrel.

“The Canadian dollar is following market sentiment today,”
said Darren Richardson, chief operating officer at Richardson
International Currency Exchange Inc.

“All eyes will be on the Bank of Canada tomorrow to see what
their guidance is on rates.”

Money markets expect the BoC on Wednesday to raise interest
rates by three-quarters of a percentage point to a 14-year high
of 4% and to then tighten further over the coming months to a
peak of nearly 4.50% next year.

The Canadian dollar was trading 0.7% higher at 1.3615
to the greenback, or 73.45 U.S. cents, after touching its
strongest intraday level since Oct. 6 at 1.3601.

Canadian government bond yields were lower across a more
deeply inverted curve, tracking the move in U.S. Treasuries.

The 10-year eased 7.3 basis points to 3.502%,
after last Friday touching its highest level in nearly 14 years
at 3.779%.
(Reporting by Fergal Smith; Editing by David Holmes and Andrea
Ricci)