CANADA FX DEBT-C$ weakens along with lower oil prices

Wed Dec 16, 2015 9:18am EST
 
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* Canadian dollar at C$1.3760, or 72.67 U.S. cents
    * Bond prices lower across the maturity curve

    TORONTO, Dec 16 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Wednesday as crude oil prices
fell, but trading was in a narrow range in the hours before the
U.S. Federal Reserve interest rate decision.
    U.S. crude prices were down 0.43 percent at $37.19 a
barrel following more evidence of growing global oversupplies,
while Brent crude lost 1.77 percent to $37.77. 
    U.S. housing data revealed signs of strength that could give
the Fed more confidence to raise interest rates on Wednesday
afternoon for the first time since June 2006. 
 
    On Tuesday, weak manufacturing data weighed on the domestic
outlook, and Bank of Canada Governor Stephen Poloz signaled
clearly that markets should not expect him to match potential
Fed rate hikes.
    At 8:39 a.m. EST (1339 GMT), the Canadian dollar 
was trading at C$1.3760 to the greenback, or 72.67 U.S. cents,
weaker than Tuesday's close of C$1.3738, or 72.79 U.S. cents.
    The currency's strongest level of the session was C$1.3729,
while its weakest was C$1.3779, just shy of Monday's 11-1/2-year
low of 1.3780.
    Foreign investors bought a net C$22.08 billion of Canadian
securities in October, mostly in bonds. The net total is up from
C$3.35 billion in September, Statistics Canada said.
 
    Canadian government bond prices were lower across the
maturity curve in sympathy with U.S. Treasuries.
    The two-year price was down 5.5 Canadian cents to
yield 0.545 percent, and the benchmark 10-year fell
26 Canadian cents to yield 1.518 percent.
    The Canada-U.S. 10-year spread was little changed at -77.5
basis points, trading near its deepest negative level in nearly
four months.
    Canadian inflation data for November is awaited on Friday. A
Reuters poll shows a pickup in the consumer price index to a 1.5
percent pace from a year earlier.

 (Reporting by Fergal Smith; Editing by Lisa Von Ahn)