CANADA FX DEBT-C$ drops, bonds rise as markets seek safety
* Canadian dollar slips to C$1.1102, or 90.07 U.S. cents
* Bonds extend safe-haven gains
TORONTO, Aug 17 (Reuters) - The Canadian dollar fell to a one-month low versus the greenback on Monday as doubts about the pace of global economic recovery pushed the market to seek safety in the U.S. dollar.
Overnight, the Canadian currency slipped to a one-month low at C$1.1126 to the U.S. dollar, or 89.88 U.S. cents, on the back of tumbling stock markets and hard-hit commodity prices, two factors that often influence the movement of the Canadian dollar.
Risk demand was stung as Chinese stocks extended losses and other stock markets followed suit, including the North American markets at Monday's open.
The price of oil slipped to its lowest point this month at below $66 a barrel as investors became more cautious about the pace of global economic recovery and any subsequent revival in energy demand. [ID:nSYD485910]
"With risk aversion levels moving higher, basically the U.S. dollar strengthened across the board," said George Davis, chief technical strategist at RBC Capital Markets, adding that the move to the C$1.11 area looked "a little overdone".
"If we continue to see short-covering here, we will see the Canadian dollar get marginally stronger. But I don't think it's going to be enough to offset what we've seen overnight."
At 10:05 a.m. (1405 GMT), the Canadian dollar was at C$1.1102 to the U.S. dollar, or 90.07 U.S. cents, down from C$1.0998 to the U.S. dollar, or 90.93 U.S. cents, at Friday's close.
BONDS HEAD HIGHER
Canadian bond prices were higher across the curve, extending safe-haven gains as stock markets fell and uneasiness about the strength of the recovery grew.
The rise built on gains made on Friday after a drop in U.S. consumer confidence data persuaded investors to exit equities and seek the safety of government bonds.
The two-year Canadian bond climbed 6 Canadian cents to C$99.42 to yield 1.292 percent, while the 10-year bond rose 38 Canadian cents to C$102.63 to yield 3.431 percent.
The 30-year bond rose 60 Canadian cents to C$118.25 to yield 3.916 percent. In the United States, the 30-year bond yielded 4.372 percent. (Reporting by Ka Yan Ng; editing by Peter Galloway)
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