CANADA FX DEBT-C$ sags more than a penny to one-week low

Thu Aug 18, 2011 10:53am EDT
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* C$ drops to C$0.9918 to the U.S. dollar, or $1.0083

* Currency touches lowest level since Aug. 11

* Bond prices surge for third session on flight to safety (Adds details, background)

By Ka Yan Ng

TORONTO, Aug 18 (Reuters) - Canada's dollar dropped to a one-week low against the U.S. currency on Thursday morning after a raft of U.S. and Canadian data did little to offset an already glum outlook for the world economy.

The nervousness, however, sent government of Canada bond prices surging for a third straight session in safe-haven gains as investors exited riskier stock markets.

The currency fell to its lowest level since Aug. 11, touching C$0.9939 to the U.S. dollar, or $1.0061, with the latest downdraft coming on the heels of data that showed U.S. factory activity in the Mid-Atlantic region plummeted in August.

The Philadelphia Federal Reserve Bank said its business activity index dropped to the lowest level since March 2009. It added to earlier soft economic news out of the United States that showed jobless claims rose in the latest week and consumer prices rose faster than expected in July. [ID:nN1E77H0E8]

Sentiment was already weighed down by the European debt crisis and persistent unease about the sluggish global recovery, which was a chief factor that sent European and North American shares lower. [MKTS/GLOB]   Continued...