CANADA FX DEBT-C$ weakens as oil, world equities slump

Mon Jun 8, 2009 8:21am EDT
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 TORONTO, June 8 (Reuters) - The Canadian dollar fell
against the greenback on Monday morning as global equities
dropped amid rising U.S. treasury yields and the price of oil
fell on a stronger U.S. dollar.
 World stocks fell on Monday as yields on 10-year U.S.
Treasuries hit a seven-month high and the U.S. dollar
strengthened on speculation the Federal Reserve may have to
tighten interest rates sooner than anticipated. [MKTS/GLOB]
 U.S. stock index futures pointed down about 1 percent on
Monday after three weeks of gains. [ID:nN08303232]
 Friday's stronger-than-expected U.S. jobs data helped to
fuel optimism about economic recovery [ID:nN05274048], said
George Davis, chief technical strategist at RBC Capital
 "A lot of people are looking at a recovery in the
employment picture as being essential for any type of sustained
recovery in the U.S. economy because it's so dependent on the
consumer," Davis said. "That, I think, is what has been
filtered into expectations the market is more firmly anchored
on a potential recovery scenario."
 In turn, the jobs data have helped to fuel speculation the
U.S. Federal Reserve may increase interest rates sooner than
what was priced into the curve, pushing up yields and boosting
the U.S. currency, he added.
 At 7:55 a.m. (1155 GMT), the Canadian currency was at
C$1.1218 to the U.S. dollar, or 89.14 U.S. cents, down from
C$1.1190 to the U.S. dollar, or 89.37 U.S. cents at Friday's
session close.
 Also weighing on the Canadian unit was the price of oil
CLc1, which fell towards $67 a barrel on Monday as a stronger
dollar prompted a retreat from a high above $70 hit last week.
 Canadian bond prices were mixed, following along U.S.
Treasuries where the two-year U.S. Treasury yields hit seven
-month highs in Europe on Monday.[ID:nL8475367]
 (Reporting by Jennifer Kwan; Editing by Padraic Cassidy)