CANADA FX DEBT-C$ tilts lower as commodity prices decline
* C$ backs off Tuesday's near 10-month high
* Lower commodity prices weighing on C$
* Bond prices higher across the curve
By Frank Pingue
TORONTO, July 29 (Reuters) - Canada's dollar was a touch softer versus the U.S. currency on Wednesday morning given a turnaround in prices for key domestic exports like oil and gold.
The lower start to the session pulled Canada's currency further from the near 10-month high it shot to on Tuesday, but the latest move lower lacked conviction and did not cause much concern among market experts.
"Right now it seems to me that you've got a market that's searching for direction," said Eric Lascelles, chief economics and rates strategist at TD Securities.
"But in the near term there have been some arguments for softness, we're seeing a bit of better economic news in the U.S. and we're getting a pretty notable decline in oil."
Oil prices dropped below $66 a barrel as U.S. data showed an unexpected rise in crude inventories [ID:nSP480296], while gold prices fell as risk aversion sent investors into the U.S. dollar. [ID:nLT428253]
At 9:00 a.m. (1300 GMT), the Canadian unit was at C$1.0863 to the U.S. dollar, or 92.05 U.S. cents, down from C$1.0831 to the U.S. dollar, or 92.33 U.S. cents, at Tuesday's close.
Canadian bond prices, with no domestic data to consider until later in the week, followed the bigger U.S. Treasury market higher across the curve ahead of what is expected to be a lower open for North American equities.
Data due for release in Canada on Thursday is expected to show a rise of 0.3 percent in producer prices for June, while raw materials prices for June are expected to rise 3.0 percent. (Editing by Chizu Nomiyama)
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