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