CANADA FX DEBT-C$ sags to 3-month low as euro zone woes widen
* C$ slips to 93.28 U.S. cents
* Bonds higher on euro zone debt concerns
By Claire Sibonney
TORONTO, Feb 4 (Reuters) - The Canadian dollar weakened to its lowest level in nearly three months on Thursday as fresh credit worries in the euro zone hit investors' appetite for riskier assets.
Worries over the financial health of Portugal and Spain have increased as investors speculate the two countries may face similar problems over their budget deficits and debt as Greece. [ID:nLDE6121AC]
These concerns helped lift the safe-haven U.S. dollar to a six-month high versus a currency basket. [FRX/]
It's got a lot of people nervous, not prepared to go into weekend-long risk, so we're just getting a wholesale clear-out," said David Watt, senior currency strategist at RBC Capital Markets.
"Whether it's stock markets, credit markets, currency markets and anything which has even a remote amount of risk to it, is just getting pummeled."
But Watt pointed out that the Canadian currency is not doing as badly as others against the U.S. dollar, with the euro, and New Zealand and Australian dollars also hitting multi-month lows NZD=AUD=EUR=.
At 12:26 p.m. (1726 GMT) the Canadian dollar was at C$1.072 to the U.S. dollar, or 93.28 U.S. cents, down from C$1.0624, or 94.13 U.S. cents, at Wednesday's close.
The Canadian currency hit a session low of C$1.0753, or 93 U.S. cents, earlier, the lowest level since Nov 9.
Investors are also awaiting U.S. and Canadian jobs data due on Friday. Market players expect a net gain of jobs in Canada.
Strong U.S. data this week supported this view ahead of key non-farm payrolls numbers due on Friday, even as U.S. jobless claims unexpectedly rose last week. ECON[ID:nN01230910]
The other key agenda item on Friday is a speech by Bank of Canada Governor Mark Carney to the Winnipeg Chamber of Commerce at 1:45 p.m. EST (1845 GMT)
Canadian government debt, like U.S. Treasury bonds, added to gains after the surprise increase in U.S. weekly jobless claims, which pointed to a labor market still under stress even as the economy grows. [ID:nN03175869]
The two-year bond CA2YT=RR was up 15 Canadian cents at C$100.455 to yield 1.275 percent, while the 10-year bond CA10YT=RR gained 50 Canadian cents to C$103.050 to yield 3.365 percent. (Reporting by Claire Sibonney; editing by Rob Wilson)
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