CANADA FX DEBT-C$ hits 2-week low on Greece fears, U.S. data
* C$ dips to 93.72 U.S. cents
* Bonds higher on risk aversion
By Claire Sibonney
TORONTO, Feb 25 (Reuters) - The Canadian dollar slumped to a two-week low against the U.S. dollar on Thursday as investors flocked to the greenback and other safe havens due to worries about possible downgrades to Greece's sovereign debt and soft U.S. economic data.
Credit agency Standard & Poor's said on Wednesday it may downgrade Greece's BBB-plus rating by one or two notches within a month, citing downside risks to growth that could hinder the country's deficit-cutting plan. [ID:nLDE61N2KL]
Moody's Investors Service also said Athens would need to enact its fiscal reform plans as promised if it was to avoid a downgrade and Fitch Ratings said that, barring surprises, it expected to keep its BBB-plus rating unchanged for the next few months. [ID:nTOE61O07C] [ID:nLAG006125]
"It keeps sovereign debt concerns on the radar screen," said Matthew Strauss, a senior currency strategist at RBC Capital Markets.
"It keeps the Greece situation alive and very much affecting the markets."
On the data front, the number of U.S. jobless claims rose unexpectedly in the latest week, while U.S. durable goods orders excluding transportation fell in January. [ID:nN2597849]
Equity markets and commodities prices, which often influence the Canadian currency, were also reeling from risk-off trade.
Oil fell below $80 a barrel, dragged lower by a rise in the dollar as the euro slid on concerns over the outlook for the European economy, while gold retreated from the $1,100 an ounce level. [O/R] [GOL]
At 9:26 a.m. (1426 GMT), the Canadian dollar was at C$1.0670, or 93.72 U.S. cents, down from Wednesday's close of C$1.0540 to the U.S. dollar, or 94.88 U.S. cents.
With equity markets lower, Canadian bond prices were higher across the curve, as investors flocked to the safety of government debt.
The two-year Canadian government bond CA2YT=RR added 9 Canadian cents to C$100.405 to yield 1.294 percent, while the 10-year bond CA10YT=RR rose 42 Canadian cents to C$102.770 to yield 3.398 percent. (Reporting by Claire Sibonney; editing by Peter Galloway)
© Thomson Reuters 2016 All rights reserved.