CANADA FX DEBT-C$ weaker as oil drops, investors shun risk

Thu Jan 29, 2009 4:46pm EST
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* C$ weaker as oil down to $41.44 a barrel

* Bonds largely lower as supply concerns persist

By Jennifer Kwan

TORONTO, Jan 29 (Reuters) - Canada's dollar weakened against the greenback on Thursday as the price of oil dropped and a batch of bleak U.S. economic data kept investors away from riskier assets.

A fresh wave of dismal U.S. data, including labor market and housing figures, added to the economic gloom and rattled investor confidence, sending North American equity markets lower. [ID:nN29272638]

This, in turn, helped to prop up the U.S. dollar as investors move to safer havens, said Millan Mulraine, economics strategist at TD Securities.

"When all the boats are leaking you want to jump to the biggest boat," he said.

The Canadian dollar finished at C$1.2233 to the U.S. dollar, or 81.75 U.S. cents, down from Wednesday's close of C$1.2152 to the U.S. dollar, or 82.29 U.S. cents.

The weakness in the Canadian currency and stocks followed a statement from the Federal Reserve on Wednesday which pointed to a grim outlook, said George Davis, chief technical strategist at RBC Capital Markets.   Continued...