CANADA FX DEBT-C$ falls to six-week low against resilient greenback

Fri Nov 13, 2015 1:49pm EST
 
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(Adds further weakening of C$, analyst comment)
    * Canadian dollar at C$1.3332, or 75.01 U.S. cents
    * Bond prices climb across the maturity curve

    By Fergal Smith
    TORONTO, Nov 13 (Reuters) - The Canadian dollar 
tumbled to a six-week low against the U.S. dollar on Friday,
pressured by a fresh 2-1/2-month low for crude oil and broader
gains for the greenback despite softer-than-anticipated U.S.
retail sales data.
    "The price action is more or less a reflection on what is
going on in crude markets," said Bipan Rai, director of foreign
exchange strategy at CIBC World Markets, adding that a close
above C$1.3354 to the U.S. dollar would open the door to levels
last seen in September, when the currency weakened to an 11-year
low.
    On the disappointing U.S. retail sales data, Rai said "it
wasn't weak enough to really change the market's mind that the
Fed is moving next month."
    At 1:00 p.m. (1800 GMT), the Canadian dollar was
trading at C$1.3332 to the greenback, or 75.01 U.S. cents,
weaker than the Bank of Canada's official close on Thursday of
C$1.3282, or 75.29 U.S. cents.
    The currency's strongest level of the session was C$1.3267,
while its weakest was C$1.3350.
    U.S. retail sales rose just 0.1 percent in October, below
analyst expectations for a 0.3 percent gain.     
    The International Energy Agency added to concerns about
oversupply in the oil market, saying in a monthly report that
stockpiles are at a record 3 billion barrels. 
    Comments by Bank of Canada Senior Deputy Governor Carolyn
Wilkins were not seen as having moved the market. In a speech in
Toronto, she said the current inflation-targeting framework is
working well and "the bar for change is high." 
    U.S. crude prices were down 3.4 percent to $40.31 a
barrel, while Brent crude lost 0.9 percent to $43.66.
    
    Canada is a major oil producer and weaker oil prices tend to
reduce the country's terms of trade and its economic outlook.
    Canadian government bond prices were higher across the
maturity curve, supported by the disappointing U.S. data and
weakness in crude oil, but also the sell-off in stocks.
    The two-year price was up 6 Canadian cents to
yield 0.618 percent and the benchmark 10-year rose
33 Canadian cents to yield 1.664 percent.
    The Canada-U.S. two-year bond spread was -24.1 basis points,
trading 1.1 basis points wider, while the 10-year spread was
little changed at -62 basis points.

 (Editing by Bernadette Baum and James Dalgleish)