CANADA FX DEBT-C$ slips as high crude supply forecasts pressure oil prices

Tue Feb 10, 2015 9:57am EST
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* Canadian dollar at C$1.2510 or 79.94 U.S. cents
    * Bond prices mixed across the maturity curve

    By Solarina Ho
    TORONTO, Feb 10 (Reuters) - The Canadian dollar retreated
against its U.S. counterpart on Tuesday, weighed by oil prices
that weakened on a report that crude stocks could approach
record highs.
    The International Energy Agency (IEA) said in its monthly
report that oil supplies remained abundant and it would take
time for investment cuts to make more than a relatively small
dent in production, keeping prices low. 
    As a major oil exporter, the Canadian dollar's moves in
recent months have largely been driven by hefty losses in crude
    "(Weaker oil) would definitely be what's creating this
jitteriness," said Camilla Sutton, chief currency strategist at
    "For the Canadian dollar, we're kind of flip-flopping in
this range ... and we're still unable to break out of that
broader range from the third of February."
    The loonie, which has had a run of volatile sessions in
recent weeks, traded between C$1.2353 and C$1.2645 on Feb. 3. 
    At 9:38 a.m. ET (1438 GMT), the Canadian dollar was
at C$1.2510 to the greenback, or 79.94 U.S. cents, softer than
Monday's close of C$1.2465, or 80.22 U.S. cents.
    A stronger greenback, powered by broadly higher U.S.
Treasury yields, added pressure on the loonie, which was
underperforming many of its major counterparts. 
    Earlier on Tuesday, Bank of Canada Governor Stephen Poloz
said in an interview that he has not been talking down the
Canadian dollar, saying it has fallen because of economic
developments, particularly the collapse in oil
    The Canadian dollar has been hit hard by diverging monetary
policies between the United States, which is widely expected to
hike interest rates this year, and Canada, which cut rates last
month and is expected to do so again this spring.
    Canadian government bond prices were mixed across the
maturity curve, with the two-year flat, with a yield
of 0.486 percent and the benchmark 10-year down 21
Canadian cents to yield 1.456 percent.

 (Reporting by Solarina Ho; Editing by Meredith Mazzilli)