CANADA FX DEBT-C$ retreats with oil prices after OPEC statement
(Adds comment, details, closing figures) * Canadian dollar at C$1.1332 or 88.25 U.S. cents * Bond prices mostly higher across the maturity curve By Solarina Ho TORONTO, Nov 27 (Reuters) - The Canadian dollar extended losses against the U.S. dollar on Thursday after OPEC's announcement that it would not cut crude output levels sent oil prices plunging to new four-year lows. Saudi Arabia blocked calls from poorer members of the Organization of the Petroleum Exporting Countries (OPEC) to cut production to stem a slide in global prices. Canada is a major exporter of crude. [IE:nL6N0TH14H] "Oil is definitely the main driver in the price action in the loonie today," said Scott Smith, senior market analyst at Cambridge Mercantile Group in Calgary. He noted, however, that the currency's drop may have been a little overdone due to the lack of liquidity in the market because of the U.S. Thanksgiving Day holiday. "On the grander scheme of things, the down draft in oil is likely to continue, and probably likely to put further pressure on the loonie in the short term as well," he said. The Canadian dollar finished at C$1.1332 to the greenback, or 88.25 U.S. cents, almost one Canadian cent down from Wednesday's close of C$1.1236, or 89.00 U.S. cents, and its weakest level in a week. Markets are likely to stay quiet on Friday with many participants in the United States taking the day off. This could mean further exaggerated moves when Canada reports gross domestic product figures for the third quarter. Smith said the Canadian dollar could see some strength on Friday if the more robust Canadian economic data seen recently translate into a jump in GDP, but he said the economy is still lagging that of the United States overall. "Obviously there's a divergence in growth trajectories between the two economies," Smith said, noting the Canadian dollar could see further pressure going forward as a result. Canadian government bond prices were mostly higher across the maturity curve with the two-year up 8 Canadian cents to yield 1.002 percent and the benchmark 10-year rising 32 Canadian cents to yield 1.899 percent. (Reporting by Solarina Ho; Editing by Peter Galloway)
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