CANADA FX DEBT-C$ touches one-month low as oil drops

Thu Jan 15, 2009 4:51pm EST
 
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* C$ drops for 5th straight session as oil falls below $36

* Bonds fall as TSX rebounds to close up 2.2 pct

By Jennifer Kwan

TORONTO, Jan 15 (Reuters) - The Canadian dollar finished at its weakest level in a month against the U.S. currency on Thursday, pressured by a drop in the price of oil on growing concerns over the economic downturn and its impact on demand.

Canadian government bond prices followed U.S. Treasuries lower, as both markets reacted to the choppy moves in equities.

The Canadian currency finished at C$1.2515 to the U.S. dollar, or 79.90 U.S. cents, down from C$1.2483 to the U.S. dollar, or 80.11 U.S. cents, on Wednesday.

The currency at one point touched C$1.2678, or 78.88 U.S. cents, its weakest level since Dec. 9, according to Thomson Reuters data.

It has fallen for five straight sessions as oil prices have dropped and economic reports in both Canada and the United States have deepened fears about the depth of the global economic downturn.

"A lot of the economic data, especially from the U.S., has continued to be weak so that brings about a lot of worries about what the fallout will be for the Canadian dollar," said Charmaine Buskas, senior economics strategist at TD Securities   Continued...