CANADA FX DEBT-C$ sells off with risk on Portugal, China news
* C$ falls to C$0.9666
* Bond prices rise, track US Treasuries
By Claire Sibonney
TORONTO, July 6 (Reuters) - The Canadian dollar fell for the third straight session against the greenback on Wednesday morning, after Moody's downgrade of Portugal's credit rating to "junk" status on Tuesday and an overnight interest rate hike in China sparked selling of risky assets.
Peripheral euro zone debt worries flared up again as risks of a contagion returned to investors' radar after the Portugal downgrade caught the market off guard. [nL6E7I60XH]
Also, China raised interest rates for the third time this year on Wednesday, making clear that taming inflation remains a top priority even as its vast economy gently eases. [nL3E7FK17V]
"Overall we're just seeing that the market is shedding risk today over fears of Portugal, broader contagion fears within Europe, as well as an interest rate hike out of China," said Camilla Sutton, chief currency strategist at Scotia Capital.
The news out of Portugal and China sent commodities such as oil lower, weighing on Canada's resource-based currency, added Sutton.
At 9:17 a.m. (1317 GMT), the currency CAD=D4 was at C$0.9666 to the U.S. dollar, or $1.0346, down from Tuesday's North American finish at C$0.9632 to the U.S. dollar, or $1.0382. Sutton expects the day's range to fall between C$0.9600 and C$0.9700. Continued...