CANADA FX DEBT-C$ extends retreat as crude prices fall
(Adds fresh comment, closing figures, details) * Canadian dollar at C$1.2576, or 79.52 U.S. cents * Bond prices higher across the maturity curve By Solarina Ho TORONTO, Feb 23 (Reuters) - The Canadian dollar weakened for the fourth straight session on Monday against a strong U.S. dollar, hurt in large part by another slide in oil prices. The latest decline followed Friday's retreat after domestic retail sales data for December fell more than expected. Crude prices, which more than halved between June and January, retreated on worries of excess crude supply. U.S. crude stocks, which are already at record highs, are expected to build in the coming months. The pace of the U.S. rig count decline, which helped provide some price support earlier, was also slowing. Canada is a major exporter of oil. The Canadian dollar briefly recouped losses after the Financial Times quoted the Nigerian Oil Minister and OPEC president as saying the country might call for an OPEC extraordinary meeting in the next six weeks or so if prices fell further. But analysts said it will likely fail without Saudi Arabia's support. "What that definitely shows is that oil is still a very key and important driver for the Canadian dollar," said Rahim Madhavji, president of commercial foreign exchange dealing firm, KnightsbridgeFX.com. "What obviously didn't help was the poor retail sales that came out last week." The Canadian dollar finished the session at C$1.2576 to the greenback, or 79.52 U.S. cents, softer than Friday's close of C$1.2546, or 79.71 U.S. cents. Looking ahead, investors will focus on a speech and press conference by Bank of Canada Governor Stephen Poloz on Tuesday for any guidance on whether the central bank will cut interest rates again at its rate announcement next week. The bank stunned markets in January with an unexpected rate cut, and markets are currently pricing in a 76.9 percent chance of another cut when it announces its decision on March 4. "They want to take a pre-emptive approach, they want a weaker loonie, they can make that happen. All the cards are in the hands of Poloz and the Bank of Canada, they're calling all the shots," said Madhavji. Investors will also be watching testimony by Federal Reserve Chair Janet Yellen on Tuesday, where she will deliver the U.S. central bank's semi-annual monetary policy report to U.S. lawmakers. Canadian government bond prices were higher across the maturity curve, with the two-year up 2.5 Canadian cents to yield 0.388 percent and the benchmark 10-year up 63 Canadian cents to yield 1.359 percent. (Reporting by Solarina Ho; Editing by Paul Simao and Chris Reese)
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