CANADA FX DEBT-C$ hit by soft oil as US$ strengthens after Greek deal

Mon Jul 13, 2015 10:14am EDT
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* Canadian dollar at C$1.2772 or 78.30 U.S. cents
    * Bond prices mixed across the maturity curve

    TORONTO, July 13 (Reuters) - The Canadian dollar weakened
sharply against its U.S. counterpart on Monday, hit by softer
crude prices as the greenback strengthened following a deal
between debt-laden Greece and euro zone leaders. 
    The currency's moves are now expected to remain limited,
however, ahead of a closely watched Bank of Canada interest rate
decision due this Wednesday.
    Markets had priced in about a 50 percent chance of a 25
basis point rate cut following a string of disappointing
Canadian economic data that indicated economic growth in the
second quarter would be stagnant after a contraction in the
first quarter, but last Friday's stronger-than-expected
employment report for June tempered some of those expectations,
with markets dropping the odds of a rate cut to about 39

    * At 9:50 a.m. EDT (1350 GMT), the Canadian dollar 
was at C$1.2772 to the greenback, or 78.30 U.S. cents, sharply
weaker than the Bank of Canada's official close of C$1.2679, or
78.87 U.S. cents, on Friday.
    * The currency's strongest level of the session was
C$1.2668, while its weakest was C$1.2774.
    * Prices for oil, a major Canadian export, tumbled as Iran
and six world powers appeared to be closing in on a nuclear deal
that would end sanctions on the Islamic Republic and let more
Iranian oil on to world markets. The Greek deal helped pare some
of its early losses, however.
    * U.S. crude prices were down 1.38 percent at $52.01
a barrel, while Brent crude lost 2.04 percent to
    * The Canadian dollar, which was weaker than many of its key
currency counterparts, is expected to trade between C$1.2700 and
 C$1.2800 against the U.S. dollar during the North American
session on Monday, according to
    * Canadian government bond prices were mixed across the
maturity curve, with the two-year price up 1 Canadian
cent to yield 0.493 percent and the benchmark 10-year
 falling 4 Canadian cents to yield 1.689 percent.
    * The Canada-U.S. two-year bond spread was -18.7 basis
points, while the 10-year spread was 74.5 basis points.

 (Reporting by Solarina Ho; Editing by Peter Galloway)