CANADA FX DEBT-C$ edges lower on crude oil slide, dip in PMI
(Adds comment, Fed and trade deal detail; updates prices) * Canadian dollar at C$1.3168 or 75.94 U.S. cents * Bond prices dip across the maturity curve By Fergal Smith Nov 5 (Reuters) - The Canadian dollar edged lower on Thursday against a firm U.S. dollar, contending with further fall-out for crude oil and slippage in the Ivey PMI, but moved in a tight range as attention turned to U.S. and Canadian employment data on Friday. The Canadian dollar closed at C$1.3168 against the U.S. dollar, or 75.94 U.S. cents, slightly weaker than Wednesday's close of C$1.3157, or 76.01 U.S. cents, but holding above Wednesday's low at C$1.3192. The market is "effectively covering positions ahead of the payroll numbers," said Jack Spitz, managing director of foreign exchange at National Bank Financial. Hawkish comments from Federal Reserve officials underpinned the U.S. dollar. Atlanta Fed President Dennis Lockhart said the Fed in its last policy statement was deliberately trying to convince investors of a possible December interest rate hike, and was successful in doing so. U.S. crude settled at $45.20 a barrel, down 2.4 percent, pressured by oversupply after hitting a one-week low at $45.12, and Brent crude fell 1 percent to $48.09. The Ivey Purchasing Managers Index slowed slightly in October. The seasonally adjusted index edged down to 53.1 from 53.7 in September, short of analysts' expectations for 54.0. A reading above 50 indicates an increase in the pace of activity. Spitz said the Canadian dollar is likely more vulnerable to weaken further "in the event that the U.S. produces better-than-expected payrolls," which would make a December rate hike more likely. Canadian government bond prices edged lower across the curve, extending recent losses. The two-year price dipped 1 Canadian cent to yield 0.630 percent, having made a new four-month high at 0.632 percent, and the benchmark 10-year fell 16 Canadian cents to yield 1.652 percent, having also made a fresh multi-month high at 1.666 percent. Spreads versus U.S. Treasuries were slightly less negative, with the 2-year spread at -21.2 basis points and the 10-year at -58.5. Canada's newly installed trade minister said the government would seek public input on the terms of the Trans-Pacific Partnership trade deal which were released on Thursday and revealed that regulatory scrutiny of foreign takeovers of Canadian companies would ease if the deal is ratified. Canadian data due on Friday is expected to show a rise of 10,000 jobs in October after a 12,100 gain in September, according to a Reuters poll. (Reporting by Fergal Smith; Editing by W Simon and James Dalgleish)
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