CANADA FX DEBT-C$ weakens on manufacturing data, lower oil

Mon Nov 16, 2015 9:39am EST
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* Canadian dollar at C$1.3349 or 74.91 U.S. cents
    * Bond prices rise across the maturity curve

    By Fergal Smith
    TORONTO, Nov 16 (Reuters) - The Canadian dollar weakened to
a fresh six-week low against the U.S. dollar on Monday, driven
by safe-haven strength for the greenback following the Paris
attacks on Friday, and also by disappointing Canadian
manufacturing data and lower crude oil prices.    
    At 9:10 a.m. ET (1410 GMT), the Canadian dollar was
trading at C$1.3349 to the greenback, or 74.91 U.S. cents,
weaker than the Bank of Canada's official close on Friday of
C$1.3318, or 75.09 U.S. cents, having hit a new six-week low at
    Canadian manufacturing sales fell by 1.5 percent in
September to the lowest level since May, impacted by lower motor
vehicle assembly and oil product sales, according to Statistics
Canada data. Analysts surveyed by Reuters had forecast a 0.1
percent rise. 
    Crude oil was unable to sustain a rebound following the
Paris attacks, reversing lower on the day.
    U.S. crude prices were down 0.20 percent to $40.66,
while Brent crude lost 0.61 percent to $44.20.    
    More encouragingly for the Canadian economy, data from
PayNet revealed that commercial borrowing by Canadian small
businesses accelerated in September, rising 14 percent compared
to the same month a year ago. 
    In addition, Canadian home sales rose 1.8 percent in
October, leaving activity near the peak recorded earlier this
year, according to the Canadian Real Estate Association.
    Statistics Canada also reported that foreign investors
bought C$3.35 billion in Canadian securities in September,
mainly due to the resumption of the purchase of Canadian shares
after two months of divestment.         
    The weak Canadian dollar offers an opportunity for exporters
but also makes it harder for companies to buy machinery to
upgrade their operations, new Finance Minister Bill Morneau said
on Sunday, speaking on the margins of the Group of 20 summit in
    Canada's new Liberal Prime Minister Justin Trudeau met
China's top leader on Monday, seeking to revive political ties
and boost trade to help energize a faltering economy.
    Canadian government bond prices were higher across the
maturity curve, with the two-year price up 1 Canadian
cent to yield 0.606 percent and the benchmark 10-year
 rising 19 Canadian cents to yield 1.631 percent.
    The Canada-U.S. two-year bond spread was -22.9 basis points,
trading 1.9 basis points narrower, while the 10-year spread was
-62.3 basis points, trading 0.4 of a basis point narrower, as
Treasuries outperformed on the potential for the Paris attacks
to delay Fed tightening.

 (Reporting by Fergal Smith; Editing by Meredith Mazzilli)