CANADA FX DEBT-C$ slips as oil reverses course; factory sales up
(Adds currency salesman comment; updates prices to close) * Canadian dollar ends at C$1.3881, or 72.04 U.S. cents * Bond prices lower across the maturity curve By Alastair Sharp TORONTO, Feb 16 (Reuters) - The Canadian dollar ended slightly weaker against its broadly stronger U.S. counterpart on Tuesday after hitting a 12-day high, losing ground as oil prices reversed gains. The loonie, as Canada's currency is colloquially known, had initially gained, helped by rising global oil prices and higher-than-expected factory sales. But crude prices fell after top producers Saudi Arabia and Russia agreed only to freeze output at January levels, and only with agreement from other major exporters. "You don't have Iran or Iraq at the table, it's going to be difficult to get Iran to agree to any sort of cutback when they're just coming back on board after such a long time," said Don Mikolich, executive director for foreign exchange sales at CIBC Capital Markets. Still, he said, the currency was showing signs of resilience given it was much weaker when oil was at similar levels a month ago. The Canadian dollar ended the session trading at C$1.3881 to the greenback, or 72.04 U.S. cents, weaker than Friday's official close of C$1.3861, or 72.14 U.S. cents. The currency was little traded during public holidays in both Canada and the United States on Monday. The currency touched its strongest level since Feb 4. at C$1.3707, while its weakest level was C$1.3840. Canadian factory sales rose 1.2 percent in December from November on gains for motor vehicles and wood products, data from Statistics Canada showed on Tuesday. In other domestic data, sales of existing homes in Canada rebounded 0.5 percent in January from December as strong demand in Toronto and Vancouver offset declines in Calgary and Edmonton, a report from the Canadian Real Estate Association showed. Bearish bets by speculators against the Canadian dollar were trimmed slightly more after reaching five-month highs in January. Net short Canadian dollar positions decreased to 51,935 contracts in the week ended Feb. 9 from 52,420 in the prior week, Commodity Futures Trading Commission data showed on Friday. Canadian government bond prices were lower across the maturity curve, with the two-year price down half a Canadian cent to yield 0.462 percent and the benchmark 10-year falling 23 Canadian cents to yield 1.159 percent. The 10-year yield touched a record low of 0.921 percent on Feb. 11 amid a flight to safety. (Additional reporting by Fergal Smith; Editing by W Simon and Leslie Adler)
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