CANADA FX DEBT-C$ weakens with oil on economic gloom

Mon Jan 12, 2009 10:47am EST
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* C$ falls vs greenback as oil falls below $40 a barrel

* Bonds flat to higher as Toronto stocks selloff

* BoC surveys show worse credit conditions, glum sentiment

By Jennifer Kwan

TORONTO, Jan 12 (Reuters) - The Canadian dollar weakened against the U.S. currency on Monday as the price of crude fell below $40 a barrel on fears a deepening recession will curb demand.

At 10:36 a.m. (1536 GMT), the Canadian currency was at C$1.204 to the U.S. dollar, or 83.06 U.S. cents, down from C$1.1908 to the U.S. dollar, or 83.98 U.S. cents, on Friday.

Bond prices were higher as money flowed from riskier assets, with Toronto's main stock index .GSPTSE down more than 2 percent.

The Canadian currency was pressured by a slump in the price of oil CLc1, which fell below $40 a barrel on fears recession is reducing global demand. [ID:nSYD425287].

The Canadian currency also continued to weaken after a negative tone set by reports on Friday from both Canada and the United States that showed disappointing monthly employment figures that further heightened concerns about the depth of the U.S. recession.   Continued...