April 27, 2017 / 9:20 PM / 3 years ago

CANADA FX DEBT-C$ weaker with oil fall, offset by NAFTA deal hopes

 (Adds comment, updates prices)
    * Canadian dollar settles at C$1.3624 or 73.40 U.S. cents
    * Bond prices little changed across the maturity curve

    By Alastair Sharp
    TORONTO, April 27 (Reuters) - The Canadian dollar hit a
fresh 14-month low against its U.S. counterpart on Thursday as
lower oil prices weighed, offsetting relief after U.S. President
Donald Trump told Canada and Mexico that Washington wanted to
renegotiate, rather than leave, NAFTA.
   The loonie, as Canada's currency is colloquially known, has
been buffeted by trade rhetoric and actions this week, including
the imposition of U.S. import duties on Canada's softwood
    The currency          ended the session trading at C$1.3624
to the greenback, or 73.40 U.S. cents, slightly weaker than the
Bank of Canada's official Wednesday close of C$1.3612, or 73.46
U.S. cents. 
    It touched C$1.3670, its weakest since Feb. 25, 2016, during
the session as lower oil prices weighed.
    Crude prices fell more than 1 percent as the restart of two
key oilfields in Libya pumped more crude into an already bloated
    The currency had fallen on Wednesday after a U.S. official
said the White House was considering a draft executive order to
withdraw from the North American Free Trade Agreement (NAFTA),
which binds the United States, Canada and Mexico.             
    On Thursday, Trump wrote on Twitter that he had spoken with
the leaders of Canada and Mexico who asked to renegotiate the
trade pact. He added: "Relationships are good - deal very
    Don Mikolich, executive director for foreign exchange sales
at CIBC Capital Markets, said the political back-and-forth had
overshadowed economic fundamentals as a driver for the currency.
    He said he expected a strong Canadian gross domestic product
number for February when the data is released on Friday.
    "If we can get back to the fundamentals a rally back to the
mid-to-low C$1.35s is possible, but it's hard to see us push
much beyond that with $49 oil," he said.
    Canadian government bond prices were little changed across
the maturity curve, with the two-year            flat to yield
0.735 percent and the benchmark 10-year             rising 2.8
Canadian cents to yield 1.572 percent.

 (Editing by W Simon and Sandra Maler)
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