CANADA FX DEBT-C$ weakens to 7-week low as oil falls

Wed Sep 14, 2016 4:38pm EDT
 
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(Adds analyst quotes and details on U.S. election and other
North American currencies, updates prices)
    * Canadian dollar ends at C$1.3197, or 75.77 U.S. cents
    * Loonie touches its weakest since July 27 at C$1.3209
    * Bond prices higher across the maturity curve

    By Fergal Smith
    TORONTO, Sept 14 (Reuters) - The Canadian dollar weakened to
a seven-week low against its U.S. counterpart on Wednesday as
oil prices fell, while uncertainty related to the U.S. election
weighed on North American currencies.
    Oil prices fell as data showing large weekly builds in U.S.
petroleum products offset a surprise draw in crude stockpiles.
U.S. crude oil futures settled $1.32 lower at $43.58 a
barrel.
    Divergence of central bank monetary policy and uncertainty
related to the upcoming U.S. presidential election are also
drivers for the Canadian dollar, said Jack Spitz, managing
director of foreign exchange at National Bank Financial. 
    "The volatility that surrounds the change in the (U.S.)
presidency, really in many respects has not yet been discounted
into the market," Spitz said.
    Mexico's peso also weakened against the U.S. dollar,
while the greenback fell against a basket of major currencies
.
    The Canadian dollar ended at C$1.3197 to the
greenback, or 75.77 U.S. cents, slightly weaker than Tuesday's
close of C$1.3170, or 75.93 U.S. cents.
    The strongest level of the session for the currency was
C$1.3128, while it touched its weakest since July 27 at
C$1.3209.
    The U.S. economy looks set to accelerate over the rest of
the year, a senior Bank of Canada official said on Wednesday, a
potentially encouraging sign for Canada just a week after the
central bank warned of risks to domestic growth. 
    Austrian Chancellor Christian Kern's opposition to a free
trade agreement between the European Union and Canada was
countered by fervent praise for the deal from his deputy at a
special parliamentary session on the matter. 
    On Monday, Canadian Trade Minister Chrystia Freeland said
her country was working toward signing a new trade agreement
with the European Union in October. 
    Canadian government bond prices were higher across the yield
curve, with the two-year up 3.5 Canadian cents to
yield 0.583 percent and the benchmark 10-year rising
40 Canadian cents to yield 1.187 percent.
    Earlier in the session, the 10-year yield touched its
highest since June 23 at 1.281 percent.
    Canadian home prices climbed 11.4 percent in August from a
year earlier, data showed. Leading the gains were the two
hottest markets, Vancouver and Toronto, where prices have more
than doubled in just over 11 years. 

 (Editing by Lisa Von Ahn and James Dalgleish)