November 11, 2016 / 2:37 PM / in 10 months

CANADA FX DEBT-C$ hits new 8-month low as oil falls; Poloz speech awaited

* Canadian dollar at C$1.3521, or 73.96 U.S. cents
    * Loonie touches its weakest since March 1 at C$1.3542
    * Bond market closed for Remembrance Day

    TORONTO, Nov 11 (Reuters) - The Canadian dollar weakened to
a fresh eight-month low against its U.S. counterpart on Friday
as oil prices fell, ahead of Bank of Canada Governor Stephen
Poloz's first public comments since Donald Trump won the U.S.
presidential election.        
    Trump has vowed to either renegotiate or scrap the North
American Free Trade Agreement, under which Canada sends 75
percent of all its exports to the United States.
    Still, Canadian officials have said that Canada could fall
back on a free trade agreement that excludes Mexico if Trump
follows through on radical protectionist policies and predicted
fears of a massive economic hit are overblown. 
    Poloz will give remarks at 9:50 a.m. EST (1450 GMT) on a
panel at a conference held by the Central Bank of Chile. The
topic of the panel will be "Monetary Policy and Spillovers."
    Despite fears about trade, chances of an interest rate cut
by mid-2017 have fallen to just one in 10, overnight index swaps
data showed. The probability was more than 30 percent just one
week ago. 
    Lower chances for a Bank of Canada rate cut come as the
market prices in the increased probability of a Federal Reserve
rate hike in December.
    U.S. crude prices were down 2.08 percent at $43.73 a
barrel as the market refocused on a persistent supply overhang
that is not expected to abate unless OPEC and other producers
cut their output significantly. 
    Oil is one of Canada's major exports.
    At 9:19 a.m. EST (1419 GMT), the Canadian dollar 
was trading at C$1.3521 to the greenback, or 73.96 U.S. cents,
weaker than Thursday's close of C$1.3483, or 74.17 U.S. cents.
    The currency's strongest level of the session was C$1.3456,
while it touched its weakest since March 1 at C$1.3542.
    Canada's bond market is closed on Friday for Remembrance
Day.
    On Thursday, the 10-year yield touched its highest intraday
since May at 1.498 percent as investors bet that Trump will
enact policies that will increase inflation.

 (Reporting by Fergal Smith; Editing by Chizu Nomiyama)

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