CANADA FX DEBT-C$ dragged to lowest level since Nov. 9
* C$ falls as low as C$1.0638 per US$
* Canadian data shows signs of growth
* Bond prices higher across the curve
By Frank Pingue
TORONTO, Nov 19 (Reuters) - The Canadian dollar slid to its lowest level in over a week on Thursday as risk appetite dried up overnight on concern emerging economies could introduce more capital controls to stem speculative flows.
The lessened demand for riskier assets was triggered by news of Brazil's latest attempt to curb foreign inflows into its soaring currency, which fanned fears more Asian nations may slap controls on capital flows. [ID:nN18128104]
"That just sent a little bit of a twang down the markets and stocks obviously had a rough night overnight," said Steve Butler, director of foreign exchange trading at Scotia Capital. "So we saw a little bit of a reversal in fortunes and the (U.S.) dollar took off overnight and Canada took out a bit of resistance up around the C$1.0620 level."
Also weighing on the domestic currency were investors gripped by nagging uncertainty over the global economy's future and a tendency to lock in some profits before year end.
That sentiment combined to send the Canadian dollar as low as C$1.0638 to the U.S. dollar, or 94 U.S. cents, its lowest level since Nov. 9.
News that Canada's economy is showing signs of growth had little impact on the currency as the reports are considered second-tier data. [ID:nN19165141]
By 9:15 a.m. (1415 GMT), the Canadian unit was at C$1.0614 to the U.S. dollar, or 94.22 U.S. cents, down from C$1.0545 to the U.S. dollar, or 94.83 U.S. cents, at Wednesday's close.
Canadian bond prices were up across the curve as investors were expected to unload riskier assets like stocks in favor of government debt after the latest U.S. weekly job claims data.
According to the report, the number of workers filing new applications for jobless insurance was unchanged last week, but the four-week moving average of claims dropped to its lowest in almost a year. [ID:nN18123033]
The two-year Canada bond was up 7 Canadian cents at C$99.95 to yield 1.278 percent, while the 30-year bond rose 14 Canadian cents to C$102.80 to yield 3.402 percent.
Canadian bonds underperformed U.S. Treasuries across much of the curve. The Canadian 10-year yield was 6.4 basis points above its U.S. counterpart, compared with 5.2 basis points on Wednesday. (Reporting by Frank Pingue; Editing by Jeffrey Hodgson)
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