CANADA FX DEBT-C$ weakens slightly as Brexit shockwaves weigh
* Canadian dollar at C$1.3018, or 76.82 U.S. cents * Bond prices higher across the maturity curve TORONTO, June 27 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Monday as Britain's vote to leave the European Union sent new shockwaves through financial markets, weighing on Canada's risk-sensitive currency. Global stocks and oil prices fell as market participants absorbed the shock of Brexit. U.S. crude prices were down 2.14 percent at $46.62 a barrel. Losses for the loonie came after it fell 1.7 percent on Friday, its largest drop in 17 months. Canada's commodity-linked economy will suffer weaker growth because of Britain's vote to leave the EU, which has put the prospect of Canadian interest rate cuts back on the table. Overnight index swaps implied a 33-percent chance of a Bank of Canada rate cut this year after having been priced for no change in policy before Brexit. At 9:22 a.m. EDT (1322 GMT), the Canadian dollar was trading at C$1.3018 to the greenback, or 76.82 U.S. cents, slightly weaker than Friday's close of C$1.2999, or 76.93 U.S. cents. The currency's strongest level of the session was C$1.2951, while its weakest was C$1.3090. Speculators cut bullish bets on the loonie for the third straight week, Commodity Futures Trading Commission data showed. Net long Canadian dollar positions tumbled to 2,595 contracts in the week ended June 21 from 18,440 contracts in prior week. Canadian government bond prices were higher across the maturity curve in sympathy with Treasuries as safe-haven assets rallied. The two-year price rose 5.5 Canadian cents to yield 0.512 percent and the benchmark 10-year climbed 35 Canadian cents to yield 1.126 percent. The Canada-U.S. 10-year spread shifted 5 basis points to -36.6 basis points, its smallest gap since May 3, as Treasuries outperformed. (Reporting by Fergal Smith; Editing by Nick Zieminski)
© Thomson Reuters 2016 All rights reserved.