CANADA FX DEBT-C$ reverses course, hits five week low

Tue Jun 23, 2009 12:10pm EDT
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* C$ hits five week low as oil price retreats

* U.S. housing data disappoints (Updates with details)

TORONTO, June 23 (Reuters) - The Canadian dollar fell to its lowest level in five weeks against the U.S. currency on Tuesday as see-sawing oil prices and equity markets cut early gains and pulled back the commodity-linked currency.

The Canadian dollar was also pressured by data showing sales of previously owned homes in the United States rose at a slower than expected pace in May, pointing to a sluggish recovery from the recession. [ID:nN23475172]

Bonds trimmed early losses as the soft U.S. economic data drew investors back to their relative safety.

"There was some disappointment in terms of the U.S. housing numbers. They've added a bit more concern in terms of how the U.S. and global economy is going to rebound," said Paul Ferley, assistant chief economist at Royal Bank of Canada.

In response, the Canadian dollar fell as low as C$1.1583 to the U.S. dollar, or 86.33 U.S. cents, its lowest level against the greenback in five weeks, before recovering a bit.

At 12:05 p.m. (1605 GMT), the currency was at C$1.1545 to the U.S. dollar, or 86.62 U.S. cents, down from C$1.1526 to the U.S. dollar, or 86.76 U.S. cents, at Monday's close.

The price of oil, a key Canadian export, fell back below $68 a barrel, after early gains helped lift the currency. Crude's retreat also steered Toronto's resource-heavy main stock index lower. [ID:nN23548199] U.S. stocks also erased morning gains. [ID:nN233372]   Continued...