CANADA FX DEBT-C$ recovers from 7-month low as greenback slides
* Canadian dollar ends at C$1.3384, or 74.72 U.S. cents * Loonie touches its weakest since March 9 at C$1.3434 * Bond prices mixed across the yield curve * 10-year yield touches a 10-day high at 1.261 percent By Fergal Smith TORONTO, Oct 28 (Reuters) - The Canadian dollar strengthened slightly against its U.S. counterpart on Friday, recovering from an earlier seven-month low as increased U.S. political uncertainty pressured the greenback, offsetting lower oil prices. For the week, the loonie fell 0.4 percent, pressured by acknowledgement last week by the Bank of Canada that it had considered cutting interest rates at its policy meeting. Position squaring ahead of the weekend helped lessen immediate pressure on the Canadian dollar, but technical indicators and recent movement in yield spreads leave the currency vulnerable to additional losses, said Jack Spitz, managing director of foreign exchange at National Bank Financial. Oil prices fell on doubts over OPEC's planned output cut, even as data showed U.S. oil drillers cut rigs for the first time since June. U.S. crude oil futures settled $1.02 lower at $48.70 a barrel. Oil is one of Canada's major exports. The U.S. dollar fell against a basket of major currencies after the Federal Bureau of Investigation said it would probe additional emails related to Democratic presidential candidate Hillary Clinton's use of a personal email server while secretary of state. The Canadian dollar ended at C$1.3384 to the greenback, or 74.72 U.S. cents, slightly stronger than Thursday's close of C$1.3387, or 74.70 U.S. cents. The currency's strongest level of the session was C$1.3353, while it touched its weakest since March 9 at C$1.3434. The U.S. economy grew at its fastest pace in two years in the third quarter as a surge in exports and a rebound in inventory investment offset a slowdown in consumer spending. Still, U.S. business spending on equipment dropped for the fourth straight quarter. Weak U.S. business investment has hampered a long-awaited pickup in growth of Canada's non-energy exports. Speculators trimmed bearish bets on the Canadian dollar, Commodity Futures Trading Commission data showed. Net short Canadian dollar positions dipped to 13,324 contracts in the week ended Oct. 25 from 14,298 in the prior week. Canadian government bond prices were mixed across the yield curve, with the two-year up 3 Canadian cents to yield 0.568 percent and the benchmark 10-year rising 10 Canadian cents to yield 1.227 percent. Earlier in the session, the 10-year yield touched its highest intraday level since Oct. 18 at 1.261 percent. (Reporting by Fergal Smith; Editing by Chris Reese)
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