CANADA FX DEBT-C$ weaker as 4-year low in oil price weighs
* Canadian dollar at C$1.1376 or 87.90 U.S. cents * Bond prices higher across maturity curve (Adds comment, updates prices to close) By Alastair Sharp TORONTO, Nov 13 (Reuters) - The Canadian dollar lost ground against its U.S. counterpart on Thursday, as a weak oil price blunted enthusiasm for the commodity-linked currency. Oil prices fell about 3 percent on Thursday to four-year lows after U.S. data showed stockpiles surged, a day after top producer Saudi Arabia raised fears it would not agree to output cuts later this month. "It's all crude-related," said David Bradley, director of currency trading at Scotiabank. "The correlation hasn't been overly strong between crude and the Canadian dollar over the last 12 months or so, but it seems to be reacting to it now." Bradley said even if crude prices stabilize, the loonie - as Canada's currency is colloquially known - would likely weaken further given Canadian interest rates are expected to stay on hold longer than U.S. rates. "I can't imagine seeing crude with a $60 handle on it and staying there for very long, whereas it's our view that dollar/Canada can continue higher regardless of what crude is doing," he said. The loonie has settled into a tighter range after weakening last week was halted by strong domestic employment data and mixed U.S. jobs data on Friday. "The oscillation between C$1.13 and C$1.14 since the payroll numbers has really been in play ... there were no legs to take dollar/Canada below C$1.1280," said Jack Spitz, managing director of foreign exchange at National Bank Financial. Spitz said "the directional bias by most traders is to buy the dips" on weak oil prices, a major Canadian export. The Canadian dollar ended the North American session at C$1.1376 to the greenback, or 87.90 U.S. cents, weaker than Wednesday's close of C$1.1316, or 88.37 U.S. cents. Legislation to approve the controversial Keystone XL oil pipeline began racing through the U.S. Congress on Wednesday, eventual approval of which could boost the loonie. "Any positive changes with respect to improving the efficiency of oil flow from Canada to the U.S. are likely to be seen as a positive for the Canadian dollar," Spitz said. Canadian government bond prices rose across the maturity curve, with the two-year up 1.5 Canadian cents to yield 1.008 percent and the benchmark 10-year bond gaining 15 Canadian cents to yield 2.044 percent. (Reporting by Alastair Sharp, editing by G Crosse)
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