CANADA FX DEBT-C$ falls on signs of weak Canada economy

Wed Jun 10, 2009 5:03pm EDT
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* C$ finishes down at 90.25 U.S. cents

* April trade gap, falling house prices weigh on sentiment

* Bonds track U.S. Treasuries lower (Updates to session close, adds details, quotes)

By Jennifer Kwan

TORONTO, June 10 (Reuters) - The Canadian dollar fell against the greenback on Wednesday, pressured by weak trade and housing data as well as by strength in the U.S. currency.

The currency finished the session at C$1.1080 to the U.S. dollar, or 90.25 U.S. cents, down from C$1.1032 to the U.S. dollar, or 90.65 U.S. cents, on Tuesday.

The currency fell on signs of economic weakness in a report showing the export-dependent country's trade balance spun into deficit in April for the third month since December. The impression was reinforced by data showing prices of new Canadian houses dropped in April by the most in almost two decades. [ID:nN10372960]

As a trading nation, when you see the emergence of a trade deficit it's a "sign that the Canadian economy continues to reel" from recession, said Michael Gregory, senior economist at BMO Capital Markets in Toronto.

Also weighing on the Canadian unit was the U.S. dollar, which rose against the euro after the release of the U.S. Federal Reserve's Beige Book, which suggested the economic contraction was moderating in some regions of the country. [ID:nWEQ001087]   Continued...