CANADA FX DEBT-C$ drops a penny to six week low

Mon Aug 8, 2011 8:24am EDT
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* C$ drops to C$0.9861 to the U.S. dollar, or $1.0141

* Bond prices jump as investors continue to exit risk

By Ka Yan Ng

TORONTO, Aug 8 (Reuters) - Canada's dollar slid almost a penny to its lowest in almost six weeks against the U.S. currency on Monday, hurt by tumbling oil prices on global unease about a possible double-dip recession and twin debt crises.

The Canadian dollar CAD=D4 fell as low as C$0.9880 to the U.S. dollar, or $1.0127, its lowest since June 28.

Deep-rooted jitters after Standard & Poor's cut the U.S. debt rating from its top-notch level on Friday sent world stocks towards a 11-month low, overshadowing relief that the European Central Bank was buying bonds of euro zone strugglers Italy and Spain. [MKTS/GLOB]

The price of oil, a key Canadian export, dropped about 4 percent to below $84 a barrel. [O/R]

Investors were seemingly unimpressed by weekend talks between the Group of Seven industrialised countries aimed at safeguarding the smooth functioning of financial markets following the U.S. debt rating cut to AA-plus from AAA.

The Canadian dollar, which was within striking distance of hitting a modern-day high not even a month ago, has lost 5 cents since late July, swept up in the global selloff of riskier assets. [ID:nN1E76K0DV]   Continued...