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TORONTO (Reuters) - The Canadian dollar fell more than half a cent to a fresh 11-month low versus the U.S. dollar on Wednesday as the downdraft in commodity prices continued to rattle the currency.
Canadian bond prices, with no key economic data to spark a move, finished mostly flat across the curve as dealers bided their time until key Canadian jobs figures are released on Friday.
The Canadian dollar closed at C$1.0477 to the U.S. dollar, or 95.45 U.S. cents, down from C$1.0419 to the U.S. dollar, or 95.98 U.S. cents, at Tuesday's close.
As has been the case in recent sessions, Canada's role as a key exporter of oil weighed on its currency since the price of oil fell to a three-month low less than a month after it vaulted to a record above $147 a barrel.
"It hasn't been the same degree that other commodity-based currencies have fallen, but normally if commodity prices fall we tend to get dragged along," said Sal Guatieri, senior economist at BMO Capital Markets.
While commodity-linked currencies have been under pressure in recent weeks, the Canadian dollar has managed to outperform other commodity-based currencies, most notably the Australian and New Zealand dollars.
Still, the Canadian currency is down 2 percent this week after two straight losing weeks, and the main culprits have been weak commodity prices and concerns about global growth.
Data released midway through the first half of the session showed Canadian purchasing activity rose more than expected in July but the figures also signaled weaker employment may be on the horizon.
The Canadian dollar rose to C$1.0449 to the U.S. dollar, or 95.70 U.S. cents, moments after the data was released since the headline number was better than expected. But the gains were short-lived and the currency eventually trickled lower.
Canadian data still due this week are June building permits coming Thursday, and the headline report for the week, the July jobs numbers, on Friday.
Canadian bond prices bounced around the break-even level for most of the session and finished mixed as events in the United States dictated direction north of the border.
Prices were supported early as U.S. mortgage lender Freddie Mac FRE.N posted its fourth consecutive quarterly loss, which weighed on U.S. stocks. But bond prices gave back some of the gains after a reassuring outlook from Cisco Systems helped U.S. stocks end higher.
"They just kind of see-sawed with U.S. equity prices," Guatieri said.
The two-year bond rose 8 Canadian cents to C$101.58 to yield 2.850 percent. The 10-year bond dipped 2 Canadian cents to C$104.48 to yield 3.700 percent.
The yield spread between the two-year and 10-year bond was 95.2 basis points, up from 90.8 basis points.
The 30-year bond fell 20 Canadian cents to C$114.85 for a yield of 4.115 percent. In the United States, the 30-year treasury yielded 4.693 percent.
The three-month when-issued T-bill yielded 2.53 percent, down from 2.54 percent at the previous close.
Editing by Peter Galloway