CANADA FX DEBT-C$ hit by soft oil as US$ strengthens after Greek deal
* Canadian dollar at C$1.2772 or 78.30 U.S. cents * Bond prices mixed across the maturity curve TORONTO, July 13 (Reuters) - The Canadian dollar weakened sharply against its U.S. counterpart on Monday, hit by softer crude prices as the greenback strengthened following a deal between debt-laden Greece and euro zone leaders. The currency's moves are now expected to remain limited, however, ahead of a closely watched Bank of Canada interest rate decision due this Wednesday. Markets had priced in about a 50 percent chance of a 25 basis point rate cut following a string of disappointing Canadian economic data that indicated economic growth in the second quarter would be stagnant after a contraction in the first quarter, but last Friday's stronger-than-expected employment report for June tempered some of those expectations, with markets dropping the odds of a rate cut to about 39 percent. * At 9:50 a.m. EDT (1350 GMT), the Canadian dollar was at C$1.2772 to the greenback, or 78.30 U.S. cents, sharply weaker than the Bank of Canada's official close of C$1.2679, or 78.87 U.S. cents, on Friday. * The currency's strongest level of the session was C$1.2668, while its weakest was C$1.2774. * Prices for oil, a major Canadian export, tumbled as Iran and six world powers appeared to be closing in on a nuclear deal that would end sanctions on the Islamic Republic and let more Iranian oil on to world markets. The Greek deal helped pare some of its early losses, however. * U.S. crude prices were down 1.38 percent at $52.01 a barrel, while Brent crude lost 2.04 percent to $57.53. * The Canadian dollar, which was weaker than many of its key currency counterparts, is expected to trade between C$1.2700 and C$1.2800 against the U.S. dollar during the North American session on Monday, according to KnightsbridgeFX.com. * Canadian government bond prices were mixed across the maturity curve, with the two-year price up 1 Canadian cent to yield 0.493 percent and the benchmark 10-year falling 4 Canadian cents to yield 1.689 percent. * The Canada-U.S. two-year bond spread was -18.7 basis points, while the 10-year spread was 74.5 basis points. (Reporting by Solarina Ho; Editing by Peter Galloway)
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