CANADA FX DEBT-C$ ekes out gain as oil offsets trade deficit hit

Tue Oct 6, 2015 10:12am EDT
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* Canadian dollar at C$1.3071 or 76.51 U.S. cents
    * Bond prices mixed across the maturity curve

    TORONTO, Oct 6 (Reuters) - The Canadian dollar extended its
four-day advance against the greenback on Tuesday, as a rally in
crude prices offset earlier losses due to data that showed
Canada's trade deficit widened in August as exports slumped.
    Exports fell by 3.6 percent, the largest decline since
January 2012, as exports of energy products sank 14.7 percent.
The slump, which comes following two months of robust growth,
pushed the country's trade deficit to C$2.53 billion, far off
the C$1.2 billion economists had forecast.
    The loonie began recouping initial losses as market
participants digested the details before edging higher. 
Economists and analysts noted that the longer term trends,
particularly in terms of volume - a key measure for the Bank of
Canada, remained "constructive".
    The price of crude, a significant Canadian export, rose more
than 2 percent on signs that the world's biggest crude producers
may act jointly to support prices, which have plunged by half
over the past year. 
    * At 9:54 a.m. EDT (1354 GMT), the Canadian dollar 
was trading at C$1.3071 to the U.S. dollar, or 76.51 U.S. cents,
marginally firmer than the Bank of Canada's official close of
C$1.3087, or 76.41 U.S. cents.
    * The currency, which was weaker than most of its
counterparts, has traded between C$1.3065 and C$1.3134 so far in
the session.
    * The U.S. trade deficit also widened as exports took a hit,
hurt by a softening global economy. The data for August could
spur further expectations that the Federal Reserve's plans to
hike interest rates will be pushed back. The trade deficit
swelled by 15.6 percent to $48.3 billion in
    * Canada's employment data for September will be due on
Friday at 8:30 a.m. EDT. 
    * U.S. crude prices were up 2.31 percent to $47.33,
while Brent crude added 2.60 percent to $50.53. 
    * Canadian government bond prices were mixed across the
maturity curve, with the two-year price flat to yield
0.513 percent and the benchmark 10-year falling 14
Canadian cents to yield 1.458 percent.
    * The Canada-U.S. two-year bond spread was -10.0 basis
points, while the 10-year spread was -61.2 basis points.

 (Reporting by Solarina Ho Editing by W Simon)