CANADA FX DEBT-C$ weakest close in five years as Bank of Canada eyes risks

(Adds closing figures, fresh comment, details)
    * Canadian dollar at C$1.1357 or 88.05 U.S. cents
    * Bond prices higher across the maturity curve

    By Solarina Ho
    TORONTO, Nov 3 (Reuters) - The Canadian dollar softened to
its weakest close in more than five years against its U.S.
counterpart on Monday, as investors piled into the U.S. dollar
and Bank of Canada Governor Stephen Poloz presented a gloomier
tone on the economy.
    In his first speech and press conference since the central
bank's quarterly Monetary Policy Report a week and a half ago,
Poloz expressed more concern over the risk of
weaker-than-expected inflation and soft growth than a jump in
both, saying upside surprises would be easier to manage.
    "A predictably dovish statement. So I don't think there was
any kind of new news. But it kind of reinforced the cautious
tone we've been hearing from the Bank," said Don Mikolich,
executive director, foreign exchange sales at CIBC World
    The Canadian dollar, underperforming most other
major currencies, closed the session at C$1.1357 to the
greenback, or 88.05 U.S. cents, sharply softer than Friday's
close of C$1.1286, or 88.61 U.S. cents.
    While it did not break a recent low of C$1.13 during the
session, it was the currency's weakest close since July, 2009.
    "This move into the (C$1.13s) has been sort of expected,"
said Mikolich. "Just a variety of things that weren't Canada
supportive ... The market seems to be building new U.S. dollar
long positions." 
    Oil prices tumbled by as much as $2 a barrel, hitting the 
lowest since mid-2012 in New York. U.S. manufacturing activity
unexpectedly accelerated in October and automobile sales were
strong, easing concerns of a significant moderation in economic
growth in the fourth quarter.
    A slew of economic data, especially from the United States,
is expected this week, culminating in monthly job reports on
both sides of the border.
    "I think the theme of a weaker Canadian dollar has been
firmly entrenched now," said Mazen Issa, senior Canada macro
strategist at TD Securities. "Over the course of the week, there
are enough event risks that would provide scope for volatility."
    The federal government will also provide its fiscal update
this month, Finance Minister Joe Oliver said on Twitter on
    Canadian government bond prices were higher across the
maturity curve, with the two-year bond rising 6.5
Canadian cents to yield 0.992 percent, and the benchmark 10-year
 climbing 6 Canadian cents to yield 2.041 percent.

 (Editing by Peter Galloway and Dan Grebler)