CANADA FX DEBT-C$ weaker after near-record trade deficit data
* Canadian dollar at C$1.3023, or 76.79 U.S. cents * Bond prices higher across the maturity curve TORONTO, July 6 (Reuters) - The Canadian dollar weakened slightly against its U.S. counterpart on Wednesday, as Canada posted a near-record trade deficit and concerns about global growth weighed on sentiment. The loonie, as the currency is colloquially known, lost ground against the yen and euro but gained against the British pound, as investor jitters about the implications of Britain's vote to quit the European Union supported assets perceived as safe havens. The yield on Canadian government 10-year bonds touched their lowest level since February. At 9:02 a.m. EDT (1302 GMT), the Canadian dollar was trading at C$1.3023 to the greenback, or 76.79 U.S. cents, weaker than the Bank of Canada's official close of C$1.3016, or 76.83 U.S. cents. Canada posted its second largest trade deficit on record in May, a large negative surprise, as widespread export weakness canceled out higher shipments from the battered energy sector, government data indicated. "The evidence on the weakness in the Canadian dollar so far paying dividends for the non-energy economy is quite patchy," said Adam Cole, global head of currency strategy for RBC Capital Markets in London. "As long as that's the case it's a vulnerability for the currency," he said, adding that further weakness this year would likely not push the currency beyond C$1.35. Canadian government bond prices were higher across the maturity curve, with the two-year price up 2 Canadian cents to yield 0.483 percent and the benchmark 10-year rising 26 Canadian cents to yield 0.969 percent. The Canada-U.S. two-year bond spread was -7.9 basis points, while the 10-year spread was -39.5 basis points. (Reporting by Alastair Sharp; Editing by Chizu Nomiyama)
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