CANADA FX DEBT-C$ weakens to nearly 3-week low against firmer greenback

Tue Aug 30, 2016 10:10am EDT
 
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* Canadian dollar at C$1.3055, or 76.60 U.S. cents
    * Loonie touches its weakest since Aug. 11 at C$1.3065
    * Canadian bond prices mixed

    TORONTO, Aug 30 (Reuters) - The Canadian dollar weakened on
Tuesday to a nearly three-week low against its U.S. counterpart,
whose gains offset higher oil prices.
    The U.S. dollar rose against a basket of currencies
as investors waited to see if Friday's U.S. jobs report would
support expectations that the Federal Reserve will raise
interest rates soon.
    Oil rose, supported by production suspensions in the U.S.
Gulf due to an expected tropical storm and speculation that
producers meeting in Algeria next month will act to prop up
prices. U.S. crude was up 0.66 percent at $47.29 a
barrel.     
    Losses for the loonie came as Canada's current account
deficit widened to a near-record C$19.86 billion ($15.28
billion) in the second quarter, data from Statistics Canada
showed. 
    At 9:44 a.m. EDT (1344 GMT), the Canadian dollar 
was trading at C$1.3055 to the greenback, or 76.60 U.S. cents,
weaker than Monday's close of C$1.3023, or 76.79 U.S. cents.
    The currency's strongest level of the session was C$1.3009,
while it touched its weakest since Aug. 11 at C$1.3065.
    Investor demand for gold and silver in the wake of Britain's
vote to leave the European Union in late June helped push
Canadian producer prices up by 0.2 percent in July, Statistics
Canada said. 
    Canadian government bond prices were mixed. The two-year
 was flat to yield 0.589 percent, and the benchmark
10-year dipped 3 Canadian cents to yield 1.03
percent.           
    Canada's gross domestic product data for the second quarter
is due for release on Wednesday. Economists expect a contraction
at a 1.5 percent annualized pace as growth was shaken by
wildfires in northern Alberta that disrupted oil production.
 
    GDP figures for June that are also set for release on
Wednesday are expected to show growth picked up by 0.4 percent,
which should bolster expectations that the economy will rebound
in the third quarter.

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