CANADA FX DEBT-C$ hits new 8-month low vs greenback, yields surge
* Canadian dollar at C$1.3549, or 73.81 U.S. cents * Loonie touches its weakest since Feb. 25 at C$1.3589 * Bond prices lower across the yield curve * 10-year yield touches an 11-month high at 1.591 percent TORONTO, Nov 14 (Reuters) - The Canadian dollar weakened to a fresh eight-month against its firmer U.S. counterpart on Monday, and Canada's bond yields surged as investors bet that U.S. President-elect Donald Trump will pursue policies that trigger higher inflation. The 10-year yield touched its highest in 11 months at 1.591 percent. Just one and a half months ago it hit a record low at 0.904 percent. The U.S. dollar posted an 11-month peak against a basket of major currencies as the risk of faster inflation and wider budget deficits, if Trump should go on a U.S. spending spree, sent U.S. Treasury and other benchmark global bond yields shooting higher. Lower oil prices added to pressure on the Canadian dollar. U.S. crude prices were down 1.11 percent to $42.93 a barrel as the prospect of another year of oversupply and weak prices overshadowed chances that OPEC will reach a deal to cut output. Oil is one of Canada`s major exports. At 9:22 a.m. EDT (1422 GMT), the Canadian dollar was trading at C$1.3549 to the greenback, or 73.81 U.S. cents, slightly weaker than Friday's close of C$1.3545, or 73.83 U.S. cents, according to Reuters data. The currency's strongest level of the session was C$1.3495, while it touched its weakest since Feb. 25 at C$1.3589. Its official close on Thursday, ahead of Friday's Remembrance Day holiday, was C$1.3483, or 74.17 U.S. cents. Canadian Prime Minister Justin Trudeau will address a Toronto summit organized by asset manager BlackRock. The meetings are part of the Liberal government's efforts to leverage private sector funds as it spends billions on infrastructure in a bid to revive sluggish economic growth. Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries. The two-year fell 6.5 Canadian cents to yield 0.662 percent and the benchmark 10-year declined 107 Canadian cents to yield 1.553 percent. The curve steepened as the spread between the 2-year and 10-year yields widened by 8.7 basis points to 89.1 basis points, its largest gap since January, indicating underperformance for longer-dated bonds. (Reporting by Fergal Smith Editing by W Simon)
© Thomson Reuters 2017 All rights reserved.