CANADA FX DEBT-C$ hits 1-week low as oil extends pullback

Wed Jun 15, 2016 9:41am EDT
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* Canadian dollar at C$1.2885, or 77.61 U.S. cents
    * The loonie touched its weakest since June 6 at C$1.2890
    * Bond prices lower across the maturity curve

    TORONTO, June 15 (Reuters) - The Canadian dollar weakened to
a new one-week low against its U.S. counterpart on Wednesday as
oil fell, but losses were restrained ahead of a U.S. interest
rate decision and after stronger-than-expected domestic
manufacturing data.
    Canadian factory sales rebounded in April, rising by a
higher-than-expected 1.0 percent from March, after declining for
two consecutive months, data from Statistics Canada showed.
     Oil prices were on course to fall for the fifth straight
session in what would be their longest losing streak since
February, knocked by mounting concerns about Britain's possible
exit from the European Union and a surprise rise in U.S.
inventories. U.S. crude prices were down 1.55 percent at
$47.74 a barrel. 
    At 9:12 a.m. EDT (1312 GMT), the Canadian dollar 
was trading at C$1.2885 to the greenback, or 77.61 U.S. cents,
weaker than Tuesday's close of C$1.2853, or 77.80 U.S. cents.
    The currency's strongest level of the session was C$1.2827,
while it touched its weakest since June 6 at C$1.2890.
    The Federal Reserve is expected to keep interest rates
unchanged on Wednesday and signal if it still plans to raise
rates twice in 2016 amid concerns about a U.S. hiring slowdown
and Britain's possible exit from the European Union.
    Sales of existing Canadian homes fell 2.8 percent in May
from a record high in April as inventories fell to all-time lows
in key regions while prices continued to climb, a report from
the Canadian Real Estate Association showed.      
    Borrowing activity by Canadian small businesses fell for the
fifth consecutive month in April, data from PayNet showed,
pointing to an economy that is struggling to regain momentum
after the steep drop in oil prices over the past two
    Canadian government bond prices were lower across the
maturity curve, with the two-year price down 1
Canadian cent to yield 0.503 percent and the benchmark 10-year
 falling 8 Canadian cents to yield 1.127 percent.
    On Tuesday, the 10-year yield hit its lowest in nearly four
months at 1.078 percent.
    Bank of Canada Governor Stephen Poloz will give a speech
titled "The Canadian Economy: A Progress Report" and will
subsequently hold a press conference. His remarks will be
published on the central bank's website at 7:40 p.m. EDT (2340
    The Bank of Canada said last month that the impact of the
wildfires in Alberta could take 1.25 percentage points off
growth in the second quarter.

 (Reporting by Fergal Smith Editing by W Simon)