CANADA FX DEBT-C$ weakens vs greenback; bonds eye U.S. data

Tue Jan 13, 2009 4:50pm EST
 
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* C$ hits lowest level this year after trade data

* Canada trade surplus narrows more than expected

* Bonds flat to higher despite rise in Toronto stocks

By Jennifer Kwan

TORONTO, Jan 13 (Reuters) - The Canadian dollar fell against the U.S. currency on Tuesday, hitting its weakest level so far this year, pressured by data that showed the country's trade surplus narrowed more than expected.

The Canadian currency closed at C$1.2248 to the U.S. dollar, or 81.65 U.S. cents, down from C$1.2154 to the U.S. dollar, or 82.28 U.S. cents, on Monday. Earlier in the day it touched C$1.2345 to the U.S. dollar, or 81.00 U.S. cents, its lowest level so far this year.

Statistics Canada said on Tuesday that the country's trade surplus narrowed more than expected in November to its lowest level in 11 years as oil prices crumbled and demand for Canadian commodities and other goods waned. [ID:N13254064]

Also pressuring the Canadian currency was data that showed the U.S. trade deficit posted its biggest contraction in 12 years in November as weak consumer demand and oil's descent caused a drop in imports. [ID:nN13386136]

A rise in the price of crude helped to put a floor under the Canadian currency, said Jack Spitz, managing director of foreign exchange at National Bank Financial.   Continued...