CANADA FX DEBT-C$ weakens to six-week low on growth fears
* C$ at C$1.0041 vs US$, or 99.59 U.S. cents * C$ hits lowest level since Feb. 27 * China import data adds to global growth fears * IMF forecasts lower commodity prices for 2012-13 * Bond prices mostly higher By Jon Cook TORONTO, April 10 (Reuters) - The Canadian dollar hit its lowest level in more than a month against its U.S. counterpart on Tuesday after soft Chinese data and a downbeat report by the International Monetary Fund raised fears of tepid global growth that hurt commodity-linked currencies. Data on Tuesday showed Chinese imports undershot expectations, growing 5.3 percent on the year in March - consistent with other data suggesting soggy domestic demand in the first quarter of the year. The weaker Chinese numbers came on the heels of Friday's disappointing U.S. jobs data and heightened fears the world's top two economies may be cooling more than expected. The swoon in Canada's growth-reliant currency mirrored the dive in global stocks on Tuesday as oil and other key commodities sank. "A lot of different asset classes are at their one-month lows or highs depending which ones," said Camilla Sutton, chief currency strategist for Scotia Capital. Canadian and U.S. stocks dropped for a fifth straight day. The Canadian dollar finished at C$1.0041 versus the U.S. dollar, or 99.59 U.S. cents, down from Monday's North American close at C$0.9965 versus the U.S. currency, or $1.0035. The currency at one point hit C$1.0046, its weakest since touching C$1.0050 on Feb. 27. Had the Canadian currency weakened beyond the C$1.0050 mark it might have signaled it was ready to break out of its recent narrow range, said Sutton. "We've been in a range for 10 weeks now and there's been a bit of complacency in terms of where we're moving to," she added. "The threat of breaking a range suddenly jumps into everyone's radar." Concerns about European debt have resurfaced and could be a catalyst for further declines if the yields on riskier Italian and Spanish debt climb further. "It's more external factors that are driving the price action in the Canadian dollar," said David Bradley, a director of foreign exchange trading at Scotia Capital. Risk sentiment also suffered after an IMF report said commodity-exporting countries should prepare for lower prices given weaker global economic activity and lower demand. Brent crude fell $2.79 to settle at $119.88 a barrel, the weakest close since Feb. 17. Copper prices also fell due to the Chinese data as investors are watching for signs that China can avoid a hard landing. Canadian government bond prices were mostly higher with Canada's 2-year bond up 10 Canadian cents to yield 1.188 percent, while the 10-year bond gained 66 Canadian cents to yield 1.995 percent.
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