CANADA FX DEBT-C$ weakens as oil prices drop
* Canadian dollar at C$1.0935 or 91.45 U.S. cents * Bond prices higher across the maturity curve By Leah Schnurr TORONTO, Aug 12 (Reuters) - The Canadian dollar weakened against the greenback on Tuesday, hurt by a drop in oil prices to a nine-month low, while investors moved to the sidelines following two back-to-back sessions of sharp moves. A lack of domestic economic data on the calendar this week has left the currency searching for a significant catalyst and is expected to keep the loonie range-bound. The market was also monitoring the ongoing geopolitical crises around the world that have caused risk sentiment to ebb and flow. "I think it's just the range-trading environment that I believe we'll be contained to throughout this week with an absence of tier-one economic data in North America," said Scott Smith, senior market analyst at Cambridge Mercantile Group in Calgary. The Canadian dollar was at C$1.0935 to the greenback, or 91.45 U.S. cents, weaker than Monday's close of C$1.0919, or 91.58 U.S. cents. "Until something dramatically changes in terms of the economic outlook between the U.S. and Canada, I think U.S. dollar-Canadian dollar is still a buy on the dips," Smith said. "That C$1.09 level will be pretty strong support going forward" Brent crude touched a nine-month low on Tuesday as steady supplies eased concerns over potential disruptions. Brent was recently down $1.21 at $103.47 a barrel, while U.S. crude lost 88 U.S. cents to $97.20 a barrel. As an exporter of oil and other natural resources, the Canadian dollar can be sensitive to commodity prices. The Canadian dollar is down 1.7 percent since the beginning of July, erasing a rally in June, as optimism over the U.S. economy has pushed investors into the greenback. While the loonie could consolidate in the near term, most analysts expect it will ultimately weaken further with C$1.10 the next level to watch. Canadian government bond prices were higher across the maturity curve, with the two-year up 1 Canadian cent to yield 1.059 percent and the benchmark 10-year up 7 Canadian cents to yield 2.069 percent. (Editing by Peter Galloway)
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