3 Min Read
* C$ falls as low as C$1.0404, or 96.12 U.S. cents
* Bond prices higher across curve
By Jennifer Kwan
TORONTO, Jan 12 (Reuters) - The Canadian dollar fell against the U.S. currency on Tuesday after the country's trade balance unexpectedly slipped back into deficit in November.
The unit dropped to a session low of C$1.0404 to the U.S. dollar, or 96.12 U.S. cents, from about C$1.0354, or 96.58 U.S. cents just before the report's release.
The data showed the trade deficit totaled C$344 million as exports grew 1.1 percent from the previous month to C$31.58 billion and imports jumped 3.9 percent to C$31.93 billion, Statistics Canada said on Tuesday.
The median forecast of analysts in a Reuters poll was for a surplus of C$600 million. [ID:nN12188141]
"Canadian data in terms of our trade data was somewhat weaker than expected and so that threw in some concern in terms of the strength of the Canadian dollar really weighing on the export sector and what that means for growth going forward," said Camilla Sutton, currency strategist at Scotia Capital.
That disappointing reading outweighed data that showed new home prices rose 0.4 percent in November for the fifth consecutive monthly gain, adding to growing evidence that the housing market is leading Canada's economic recovery. [ID:nN12254432]
At 8:59 a.m. (1359 GMT), the Canadian dollar was at C$1.0400 to the U.S. dollar, or 96.15 U.S. cents, down from Monday's finish at C$1.0335 to the U.S. dollar, or 96.76 U.S. cents.
Sutton said the Canadian dollar had been weaker leading into the report, weighed down by a firmer U.S. dollar and as commodity linked currencies were knocked down after China said it would tighten banks' reserve requirements. [FRX/]
"It's looking like China is entering into a much tighter monetary policy environment," said Sutton.
Canadian bond prices were higher, mirroring gains in U.S. Treasuries, which rose as stocks looked set to open lower. [US/] (Editing by Jeffrey Hodgson)