REFILE-CANADA FX DEBT-C$ falls with oil, bonds rise

Thu Mar 5, 2009 11:00am EST
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(Refiles to fix typo in headline)

* Canadian dollar weakens as growth prospects, oil weigh

* BoE, ECB cut interest rates; see weak growth

* Bonds rise as equities slide (Adds details)

TORONTO, March 5 (Reuters) - The Canadian dollar fell on Thursday as the prospect of sustained global economic weakness drove up safe haven flows to the U.S. dollar.

Falling oil prices also weighed on the Canadian dollar. Oil is a key Canadian export and often sets direction for the currency.

At 10:12 a.m. (1512 GMT), the Canadian dollar was at C$1.2800 to the U.S. dollar, or 78.13 U.S. cents, down from C$1.2754, or 78.41 U.S. cents, at Wednesday's close.

The Canadian dollar rallied more than 1 U.S. cent on Wednesday as investors bought up riskier assets, spurred partly by expectations that China would introduce extra stimulus measures.

However on Thursday Premier Wen Jiabao said China would ramp up deficit spending this year to hit its 8 percent growth target, but did not announce an increase in the country's two-year economic stimulus plan. [ID:nSP395150].   Continued...