December 10, 2015 / 2:31 PM / in 3 years

Canadian dollar edges lower as weak crude oil prices weigh

TORONTO (Reuters) - The Canadian dollar edged slightly lower against the U.S. dollar on Thursday after U.S. crude oil prices hit a fresh trend low below $37 a barrel, contrasting with gains for fellow commodity currencies, the Australian and New Zealand dollars.

A Canadian Loonie, otherwise known as a one dollar coin, is displayed on top of an American one dollar bill in this posed photograph in Toronto, October 10, 2008. REUTERS/Mark Blinch

Oil gave up earlier gains as persistent oversupply concerns offset a surprise fall in U.S. crude inventories after 10 weekly rises.

U.S. crude CLc1 prices were down 0.70 percent to $36.90 a barrel, while Brent crude LCOc1 lost 0.22 percent to $40.02.

A rise in the number of Americans filing for unemployment benefits had little impact, as the underlying trend remained consistent with tightening conditions.

Canadian industrial production capacity climbed 0.6 percentage points to 82.0 percent in the third quarter of 2015, close to expectations, following two consecutive quarterly declines.

New home prices in Canada rose by a higher-than-expected 0.3 percent in October from September on higher prices in the Toronto area.

At 9:14 a.m. EST (1414 GMT), the Canadian dollar CAD=D4 was trading at C$1.3571 to the greenback, or 73.69 U.S. cents, slightly weaker than the Bank of Canada’s official close of C$1.3564, or 73.72 U.S. cents.

The currency’s strongest level of the session was C$1.3533, while its weakest level was C$1.3580.

Against the Australian dollar, the Canadian dollar weakened to C$0.9898, having hit its weakest level in 10 months at C$0.9938 after Australian employment surged for the second straight month.

The Canadian dollar also underperformed against the New Zealand dollar after New Zealand’s central bank cut its benchmark interest rate to match a record low of 2.50 percent, but virtually shut the door on further easing.

Canadian government bond prices were mixed across the maturity curve, with the two-year CA2YT=RR price down 1 Canadian cent to yield 0.542 percent and the benchmark 10-year CA10YT=RR rising 7 Canadian cents to yield 1.483 percent.

The Canada-U.S. two-year bond spread was 1 basis point wider at -39.3 basis points, while the 10-year spread was 2 basis points wider at -73.7 basis points, extending recent out performance for Canadian bonds.

Canadian Prime Minister Justin Trudeau said on Wednesday his government would see if it could stick to its target for budget deficits but stressed he would do what was necessary and responsible to attain the desired level of economic growth.

Reporting by Fergal Smith; Editing by Nick Zieminski

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