CANADA FX DEBT-C$ drops as oil price, Greece anxiety weigh

Wed Jun 24, 2015 4:59pm EDT
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(Updates throughout with comment, closing figures)
    * Canadian dollar at C$1.2400 or 80.65 U.S. cents
    * Bond prices higher across the maturity curve

    By Solarina Ho
    TORONTO, June 24 (Reuters) - The Canadian dollar retreated
more than half a percent against the greenback on Wednesday as
crude oil prices fell, while  anxiety over whether Greece and
its creditors would arrive at an 11th-hour debt deal kept
markets on edge.
    Oil prices fell more than 1 percent, hit by the uncertainty
about Greece as well as by a U.S. government report that showed
a large build in gasoline and distillates such as heating oil,
which offset numbers that showed U.S. crude inventories fell for
an eighth straight week. 
    Brent futures settled down 96 cents, or 1.5 percent,
at $63.49 a barrel, while U.S. crude finished down 74
cents, or 1.2 percent, at $60.27. Canada is a major oil exporter
and the loonie's moves are often linked with crude prices. 
     The Canadian dollar finished at C$1.24 to the
greenback, or 80.65 U.S. cents, softer than the Bank of Canada's
official close of C$1.2333, or 81.08 U.S. cents, on Tuesday.
    "I actually thought yesterday we'd get more of a tear-away
in USD/CAD, but it just fizzled right out. We've had another run
today, and we managed to get above $1.24," said Amo Sahota,
director at Klarity FX in San Francisco.
    "It's been a slow grind higher. The market has been
generally U.S. dollar bullish, but just a little bit. It's
something that could give up very, very quickly."
    The loonie was weaker against most other key currencies.
Against the greenback it traded between C$1.2276 and C$1.2423,
its weakest level since June 9. 
    Figures on Wednesday showed the U.S. economy contracted in
the first quarter, but less than estimated, with growth
rebounding so far in the second quarter. Market reaction to the
data was muted. 
    Canadian government bond prices were higher across the
maturity curve, with the two-year price up 5.5
Canadian cents to yield 0.604 percent and the benchmark 10-year
 rising 46 Canadian cents to yield 1.778 percent.
    The Canada-U.S. two-year bond spread was -8.00 basis points,
while the 10-year spread was -59.6 basis points.

 (Reporting by Solarina Ho; Editing by Peter Galloway)