CANADA FX DEBT-Growth concerns keep C$ grounded
* C$ flat vs US$ at C$0.9783, or $1.0222
* Canada April building permits plunge 21.1 pct
* Bond prices lower (Adds details)
By John McCrank
TORONTO, June 6 (Reuters) - Canada's dollar was flat against the U.S. currency on Monday morning as lower oil prices and lingering doubts about the economy of Canada's main trading partner -- the United States -- kept it from gaining traction.
The price of U.S. crude oil was down more than 1 percent at $99.22 a barrel on worries of a slowdown in economic growth. [O/R] [ID:nN06323773]
Canada is the top oil exporter to the United States, which absorbs around three-quarters of all Canadian exports.
"There are concerns that the U.S. economy just can't maintain momentum at all," said David Watt, senior currency strategist at RBC Capital Markets.
A report on Friday showed U.S. nonfarm payrolls rose far less than expected in May and the U.S. jobless rate rose to 9.1 percent. The Canadian dollar sank to its weakest level since March 21 after the data was released.
The U.S. dollar rallied in March, but has had a lackluster performance since then and the only major currency that has not made up its losses against the greenback is the Canadian dollar, Watt said.
At 10:35 a.m., the Canadian dollar [CAD=D4] was at C$0.9783 to the U.S. dollar, or $1.0222, equal to its North American session close on Friday.
Against the euro on Monday it fell as low as $1.4368, its weakest point since February 2010.
Market players have been pushing out their forecasts for when the Bank of Canada will resume raising interest rates as North American economic data has generally disappointed. The central bank increased rates three times last year, stopping in September at 1 percent.
A recent Reuters poll of primary dealers showed that they expect Canadian interest rates to rise in September. [CA/POLL] A poll a month earlier forecast the Bank of Canada would resume tightening in July.
Adding to concerns about the outlook for North American growth, a report on Monday showed that the value of Canadian building permits plunged 21.1 percent in April. The market had expected ad 6.0 percent decline. [ID:nN06254333]
Market players will turn their focus to Canadian data on trade and employment later in the week. [ECONCA]
The Canadian government's budget, due to be presented after market close on Monday, will also be in the spotlight. Finance Minister Jim Flaherty has said it will be largely the same as the one he introduced in March. The minority Conservative government was brought down before that one could be passed. The Conservatives won a majority in the May election and passage of their budget is now assured.
Canada's two-year bond [CA2YT=RR] was down 1 Canadian cent to yield 1.442 percent, while the 10-year bond [CA10YT=RR] was down 15 Canadian cents to yield 3.013 percent. The 30 year bond [CA30YT=RR] was down 54 Canadian cents with a yield of 3.503. (Reporting by John McCrank; editing by Peter Galloway)
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