CANADA FX DEBT-C$ slips to 1-week low as risk appetite fades

Tue Nov 17, 2009 9:11am EST
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 * C$ slides as low as C$1.0595 per US$
 * Lower commodity prices weigh on C$
 * Bond prices stay lower after U.S. data
 By Frank Pingue
 TORONTO, Nov 17 (Reuters) - Canada's currency tumbled to
its lowest level in a week versus the U.S. dollar on Tuesday
given a backdrop of weaker equities and commodity prices that
shook investor appetite for riskier assets.
 The Canadian dollar had earlier fallen to C$1.0595 to the
U.S. dollar, or 94.38 U.S. cents, which was 1 percent below its
Monday closing level and its weakest since Nov. 10, before
rebounding slightly.
 Keeping it pinned down were lower prices for key Canadian
exports like oil and gold, which often influence the direction
of the country's currency.
 Oil prices gave back some of the previous session's rally
and were holding around $79 a barrel, while gold backed off the
record high reached Monday. [O/R] [GOL/]
 Also, North American equities were pointing to a lower
start to the session on the heels of a slide in world stocks as
investors locked in gains from a recent rally.
 "The currency is a little bit weaker this morning in the
wake of softer commodity prices and generally weaker equities
markets," said Michael Gregory, senior economist at BMO Capital
 "This is a sign that investors perhaps have a little less
risk appetite this morning which of course hurts peripheral
currencies like the Canadian dollar."
 By 8:55 a.m. (1355 GMT), the Canadian unit was at C$1.0580
to the U.S. dollar, or 94.52 U.S. cents, down from C$1.0471 to
the U.S. dollar, or 95.50 U.S. cents, at Monday's close.
 Domestic bond prices were a touch lower across the curve,
following a decline in the bigger U.S. Treasury market, which
only briefly recovered after the release of U.S. producer price
data for October.
 The U.S. data showed producer prices rose more slowly than
expected in October despite a rebound in food and energy costs,
which pointed to tame inflation pressures. [ID:nN16516980]
 (Additional reporting by Scott Anderson; Editing by Jeffrey