CANADA FX DEBT-C$ slides alongside oil as crude inventories surge
(Adds more information, comment, closing figures) * Canadian dollar at C$1.2538 or 79.76 U.S. cents * Bond prices mixed across the maturity curve By Solarina Ho TORONTO, April 8 (Reuters) - The Canadian dollar retreated against its U.S. counterpart on Wednesday, tracking oil prices that tanked following an enormous rise in U.S. crude stocks. Crude inventories soared three times more than expected, to more than 10 million barrels, hitting a record 482.39 million last week, according to government data. The price of crude, a major Canadian export, tumbled more than six percent after hitting 2015 highs in the previous session. "It's all oil prices today," said Benjamin Reitzes, senior economist and foreign exchange strategist at BMO Capital Markets. "Prices dropped and the Canadian dollar weakened right along with them." Crude was already under pressure prior to the U.S. data on news that Saudi Arabia's monthly oil production hit a record. The Canadian dollar finished the session at C$1.2538 to the greenback, or 79.76 U.S. cents, weaker than the Bank of Canada's official close on Tuesday of C$1.2504, or 79.97 U.S. cents. Earlier in the session, the loonie touched C$1.2388 before retreating. The currency was also hampered by a stronger U.S. dollar, which rose for the third straight session. It strengthened after Federal Reserve minutes showed policy makers were set for a likely interest rate increase this year. The central bank will be closely watching economic data to gauge exactly when the next rise will take place. Expectations of a June increase have been tempered following a dismal jobs report for March. "You'd have to think that, if anybody was on the fence, those folks saying a June move was possible, that the weaker payroll number probably would've pushed them a little bit toward September," said Reitzes. With little else on the domestic economic calendar until Friday's Canadian employment figures for March, currency direction will likely continue to be driven by crude prices and U.S. dollar moves. Canadian government bond prices were mixed across the maturity curve, with the two-year price down 1 Canadian cent to yield 0.506 percent and the benchmark 10-year edging up 2 Canadian cents to yield 1.342 percent. The Canada-U.S. two-year bond spread stood at -3.00, while the 10-year spread was -56.4. (Reporting by Solarina Ho; Editing by Peter Galloway and Andre Grenon)
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