CANADA FX DEBT-C$ falls through C$1.15 on cheap oil, U.S. retail data
* Canadian dollar ends at C$1.1527 or 86.75 U.S. cents * Bond prices lower across the maturity curve (Adds strategist's comment, updates prices to close) By Alastair Sharp TORONTO, Dec 11 (Reuters) - The Canadian dollar weakened to a fresh five-year low against its U.S. counterpart on Thursday, weighed down by another drop in the price of crude oil and by healthy U.S. retail sales, which boosted the greenback. U.S. crude futures ended the day below $60 a barrel, also a five-year low, pressured by signs that already ample supply will be even more plentiful in 2015. The precipitous fall in crude, a major Canadian export, in recent weeks is forcing a reassessment of the outlook for the loonie. "Roughly speaking, if we start to think about oil prices below $50 a barrel for any significant period of time, you're talking in all likelihood of dollar/Canada getting up to the C$1.20 to C$1.25 range," said Shaun Osborne, chief currency strategist at TD Securities. He said TD, which had for months been an outlier in predicting the Canadian currency would fall as low as C$1.15 by yearend, may now have to adjust its latest forecast, which is for the currency to trade at C$1.19 to the greenback by the third quarter of next year. The Canadian dollar ended the session at C$1.1527 to the greenback, or 86.75 U.S. cents, weaker than Wednesday's close of C$1.1480, or 87.11 U.S. cents. That is its weakest level since mid-2009. Meanwhile, U.S. consumer spending advanced at a brisk clip in November as lower gasoline prices gave the holiday shopping season a boost, offering the latest sign of underlying momentum in the U.S. economy. "The (U.S.) dollar is healthy, firmer on the decent retail sales data, which looks like it's adding up to a solid consumer performance in Q4," said Adam Cole, global head of foreign exchange strategy at Royal Bank of Canada. "And then Canada is being hit specifically on the weakness in oil prices again." RBC's Cole also said the outlook for the Canadian currency will only get worse if crude continues its slide. "The lower it goes, the more it matters for Canada and the Canadian currency," he said. Canadian government bond prices were lower across the maturity curve, with the two-year down 4.5 Canadian cents to yield 1.019 percent and the benchmark 10-year down 10 Canadian cents to yield 1.829 percent. (Reporting by Alastair Sharp; Editing by Meredith Mazzilli and Peter Galloway)
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