CANADA FX DEBT-C$ weakens as oil tumbles, loonie loses 2.2 pct in October
(Adds analyst quotes and details on trade minister's comments and producer price data and updates prices) * Canadian dollar ends at C$1.3411, or 74.57 U.S. cents * Loonie falls 2.2 percent for month of October * Bond prices higher across the yield curve By Fergal Smith TORONTO, Oct 31 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Monday as oil prices tumbled, but losses were restrained after much deeper losses over the course of the month. For October, the loonie fell 2.2 percent, pressured by the Bank of Canada's recent acknowledgement that it had considered cutting interest rates at its policy meeting. Losses have become "stretched" and investors are not going to chase the Canadian dollar lower, but will wait to sell it on bounces, said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets. U.S. crude oil futures settled $1.84 lower at $46.86 a barrel on doubts about OPEC's ability to implement its planned production cuts, with the market further weighed by expectations that the cartel had record output in October. "It's going to take bigger moves in key fundamentals," such as the price of oil, U.S. interest rates, or Republican presidential candidate Donald Trump's probability of winning the U.S. election for the Canadian dollar to move much lower, Anderson said. Trump has said he would renegotiate or scrap the North American Free Trade Agreement if he is elected. The Canadian dollar ended at C$1.3411 to the greenback, or 74.57 U.S. cents, weaker than Friday's close of C$1.3384, or 74.72 U.S. cents. The currency's strongest level of the session was C$1.3376, while its weakest was C$1.3431. On Friday, the loonie touched its weakest since in seven months at C$1.3434. The Canadian government will have to work hard to ensure firms can benefit from a landmark free trade deal that Canada has reached with the European Union, Trade Minister Chrystia Freeland said. Speculators trimmed bearish bets on the Canadian dollar, Commodity Futures Trading Commission data showed on Friday. 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 higher across the yield curve, with the two-year up 3.5 Canadian cents to yield 0.55 percent and the benchmark 10-year rising 27 Canadian cents to yield 1.198 percent. In domestic data, producer prices rose by 0.4 percent in September from August. On Tuesday, data is expected to show that Canada's economy grew 0.2 percent in August. Also on Tuesday, the Canadian government will update its fiscal and economic position, providing new estimates for its budget deficit and for economic growth. (Reporting by Fergal Smith; Editing by Lisa Von Ahn and Alistair Bell)
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