CANADA FX DEBT-C$ weaker after manufacturing sales tumble
* Canadian dollar at C$1.2332 or 81.09 U.S. cents * Bond prices higher across the maturity curve OTTAWA, June 15 (Reuters) - The Canadian dollar weakened against the greenback on Monday, after data showed domestic factory sales fell much more than expected in April. The loonie was also pressured by modest strength in the U.S. dollar as investors were turning their attention to the Federal Reserve's policy meeting later this week. * At 9:38 a.m. ET (1338 GMT), the Canadian dollar was trading at C$1.2332 to the greenback, or 81.09 U.S. cents, softer than the Bank of Canada's official close of C$1.2311, or 81.23 U.S. cents. * The currency's strongest level of the session was C$1.2301, while its weakest level was C$1.2361. * Canadian manufacturing sales dropped 2.1 percent in April, the third decline in four months, on lower sales of food and aerospace products and parts. * While the Federal Reserve is expected to keep interest rates on hold this week, investors will be looking for a clear signal of when the central bank will start to raise rates from their historic lows. Analysts said markets could trade cautiously until then. * U.S. crude prices were down 1.13 percent to $59.28 a barrel, while Brent crude lost 1.83 percent to $62.70 a barrel. * Canadian government bond prices were higher across the maturity curve, with the two-year price up 6.5 Canadian cents to yield 0.619 percent and the benchmark 10-year rising 53 Canadian cents to yield 1.75 percent. * The Canada-U.S. two-year bond spread was -7 basis points, while the 10-year spread was -57.8 basis points. (Reporting by Leah Schnurr; Editing by Meredith Mazzilli)
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