CANADA FX DEBT-C$ gains on weaker greenback, pause in oil price drop

Mon Dec 1, 2014 9:55am EST
 
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* Canadian dollar at C$1.1370 or 87.95 U.S. cents
    * Bond prices higher across the maturity curve

    By Solarina Ho
    TORONTO, Dec 1 (Reuters) - The Canadian dollar rose against
its weaker U.S. counterpart on Monday after trading near
five-year lows earlier in the session, as slumping oil prices
recovered some of their recent heavy losses.
    Crude prices, which have fallen for five straight months,
continued their longest losing streak since the 2008 financial
crisis, hitting five-year lows. Prices have dropped more than 12
percent since OPEC's decision last week not to cut crude
production.
    "Oil seems to have found a temporary base here for now,
obviously CAD is benefiting from that. It's also benefiting from
the fact that the U.S. dollar is weaker across the board as
well," said Brad Schruder, director of foreign exchange sales at
BMO Capital Markets, adding that the U.S. dollar was likely
seeing some profit-taking.
    "Obviously it was a very wild ride last week. It's clear
that Canada was hurt by declining oil prices."
    At 9:29 a.m. (1429 GMT), the Canadian dollar was at
C$1.1370 to the greenback, or 87.95 U.S. cents, stronger than
Friday's finish at C$1.1440, or 87.41 U.S. cents.
    Earlier in the session, it touched C$1.1459, or 87.27 U.S.
cents, just shy of the C$1.1466 hit more than three weeks ago,
which was the currency's weakest level since July 2009.
    Schruder said last week's price action indicates the market
should expect more weakness ahead for the loonie.
    This week, investor attention will turn to a slew of central
bank decisions around the world, including the Bank of Canada on
Wednesday, and key economic data culminating in labor market
figures on both sides of the border on Friday.
    "It's an extremely busy week with plenty to chew on as far
as direction from central banks and economic underpinnings,"
said Schruder.
    Canadian government bond prices were higher across the
maturity curve, with the two-year up 3 Canadian cents
to yield 0.971 percent and the benchmark 10-year up
2 Canadian cents to yield 1.845 percent.

 (Reporting by Solarina Ho; Editing by Meredith Mazzilli)