CANADA FX DEBT-C$ slips as swine flu, bank worries weigh

Tue Apr 28, 2009 9:17am EDT
 
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* C$ sags to 81.93 U.S. cents

* Bond prices mixed across the curve

* Swine flu, bank concerns pressure equity markets

By Jennifer Kwan

TORONTO, April 28 (Reuters) - Canada's currency fell on Tuesday morning, pressured by worries about swine flu, weakness in oil prices and concerns about the stability of the U.S. banking sector.

World stocks and the price of oil fell on Tuesday as a report that major U.S. banks may need more capital added to concerns in the market about a possible flu pandemic. The World Health Organization raised its alert level on swine flu to phase 4. [MKTS/GLOB].

"It still is the pandemic fears that are coming out of Mexico and the uncertainty around that," said Eric Lascelles, chief economics and rates strategist TD Securities.

Oil prices, a key Canadian export, extended Monday's losses and fell toward $49 a barrel as fears over the flu fueled demand concerns. [ID:nSP458959]

"The Canadian dollar gets the short end of the stick, both for commodity and safe-haven reasons and that is ultimately why it's lost a little bit of ground," he added.   Continued...