CANADA FX DEBT-C$ retreats alongside crude prices; Poloz eyed

Wed Dec 10, 2014 9:53am EST
 
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* Canadian dollar at C$1.1461 or 87.25 U.S. cents
    * Bond prices mixed across the maturity curve

    By Solarina Ho
    TORONTO, Dec 10 (Reuters) - The Canadian dollar was slightly
weaker against its U.S. counterpart on Wednesday, pulled lower
as crude prices marched back toward five-year lows following an
OPEC forecast of sinking demand next year.
    The Organization of the Petroleum Exporting Countries said
it expects demand for its oil will be 280,000 barrels per day
lower in 2015 that it had forecast previously. Canada is a major
oil producer and the Canadian dollar is sensitive to moves in
crude prices.  
    "There's an eye on oil given that we're pressing toward the
lows reached yesterday," Greg Moore, senior currency strategist
at Royal Bank of Canada, said of the Canadian dollar's moves.
     "But really we're still more consolidating within the range
of the past couple of days in view of the fact that there hasn't
been any significant macro developments or bigger moves in
commodities in the past 12 hours or so."
     At 9:26 a.m. (1426 GMT), the Canadian dollar,
which was underperforming nearly all its counterparts, was at
C$1.1461 to the U.S. dollar, or 87.25 U.S. cents, weaker than
Tuesday's finish of C$1.1440, or 87.41 U.S. cents.
    Moore said there was a chance the loonie could break through
C$1.15 again in the coming days, and he added that the
volatility of oil prices raises the possibility that the
Canadian dollar will close the year weaker than C$1.15.
    The currency also could be moved by a press conference later
on Wednesday morning by Bank of Canada Governor Stephen Poloz
and Senior Deputy Governor Carolyn Wilkins following the release
of the bank's Financial System Review.
    Canadian government bond prices were mixed across the
maturity curve. The two-year bond was off half a
Canadian cent, yielding 1.024 percent, and the benchmark 10-year
bond was up 7 Canadian cents with a yield of 1.872
percent.

 (Editing by Peter Galloway)