CANADA FX DEBT-C$ weakens as oil falls, investors weigh Trump impact
* Canadian dollar at C$1.3491, or 74.12 U.S. cents * Bond prices lower across steeper yield curve * 10-year yield hits highest since May 4 at 1.461 percent TORONTO, Nov 10 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Thursday, pressured by lower oil prices and broader gains for the greenback as investors weighed how the policies of U.S. president-elect Donald Trump could affect economic growth. Trump has promised to cut taxes and spend on infrastructure, but analysts said fears about the impact of some of his campaign promises on Canadian trade have raised the risk of an interest rate cut by the Bank of Canada. The central bank cut rates twice last year as a plunge in oil prices hit the economy. The bank has kept rates at 0.50 percent since July 2015, but acknowledged after its policy meeting last month that it had considered cutting again. Canada relies heavily on selling goods and services into the much larger U.S. market. Trump has pledged to renegotiate the North American Free Trade Agreement. U.S. crude prices were down 1.33 percent at $44.67 a barrel as markets focused on global oversupply and a key OPEC meeting this month at which members could decide to cut production. Oil is one of Canada's major exports. At 9:37 a.m. EDT (1437 GMT), the Canadian dollar was trading at C$1.3491 to the greenback, or 74.12 U.S. cents, weaker than Wednesday's close of C$1.3378, or 74.75 U.S. cents. The currency's strongest level of the session was C$1.3386, while its weakest was C$1.3498. On Wednesday, the loonie touched an eight-month low at C$1.3525. In domestic data, new home prices rose 0.2 percent in September from the previous month, Statistics Canada said. Canadian government bond prices were lower across a steeper yield curve in sympathy with U.S. Treasuries as investors bet that Trump will enact policies that will increase inflation. The two-year price fell 8.5 Canadian cents to yield 0.634 percent and the benchmark 10-year declined 81 Canadian cents to yield 1.461 percent, its highest since May 4. (Reporting by Fergal Smith; Editing by Bernadette Baum)
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