CANADA FX DEBT-Canadian dollar edges lower as oil retreats

Mon Feb 7, 2011 3:36pm EST
 
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   * Falls to C$0.9897 per U.S. dollar, or $1.0104
 * U.S. crude oil futures down
 * Bond prices mixed in choppy trade
 (Recasts, updates to afternoon, adds details, quotes)
 By Claire Sibonney
 TORONTO, Feb 7 (Reuters) - Canada's dollar pulled back
against the U.S. currency on Monday, reversing earlier gains,
tracking oil prices lower as Mideast supply remained stable
despite continued unrest in Egypt.
 U.S. crude futures retreated for a third session on Monday,
dropping to their lowest level in more than a week, as
investors weighed the lack of disruption in supplies from the
Middle East against speculation that oil prices could spike if
the Suez Canal were closed. [O/R]
 "It really looks like this short-term volatility in the
North American afternoon is pretty connected to (oil prices),"
said Sacha Tihanyi, a currency strategist at Scotia Capital.
 He noted the currency's move was still fairly restrained,
with little in the way of economic data in Canada until monthly
trade figures are released on Friday.
 At 3:19 p.m. (2019 GMT), the Canadian dollar CAD=D4 was
at C$0.9897 to the U.S. dollar, or $1.0104, down slightly from
Friday's North American close at C$0.9884 to the U.S. dollar,
or $1.0117.
 Scotia Capital put the Canadian dollar's trading range on
Monday between C$0.9850 and C$0.9950 to the greenback.
 Earlier, the currency had advanced along with global stock
markets and commodity prices. It benefited as well from some
second-tier domestic data that showed building permits
rebounded in December. [ID:nN07203696]
 Canadian government bond prices also turned choppy in
afternoon trade, reversing some earlier losses.
 The two-year bond CA2YT=RR was flat to yield 1.848
percent, while the 10-year bond CA10YT=RR rose 14 Canadian
cents to yield 3.443 percent.
 (Reporting by Claire Sibonney; editing by Rob Wilson)