November 27, 2017 / 9:36 PM / 3 years ago

CANADA FX DEBT-C$ weaker as oil slips from two-year high

 (Adds trader comment, updates prices)
    * Canadian dollar at C$1.2764, or 78.86 U.S. cents
    * Bond prices higher across maturity curve

    By Alastair Sharp
    TORONTO, Nov 27 (Reuters) - The Canadian dollar turned
weaker against its U.S. counterpart on Monday, as U.S. oil
prices pulled back from a two-year high amid uncertainty about
Russia's resolve to extend output cuts at a meeting of producing
countries this week.
    At 4 p.m. (2100 GMT), the Canadian dollar          was
trading at C$1.2764 to the greenback, or 78.86 U.S. cents, down
0.45 percent at close to its weakest point of the session. It
gained 0.4 percent last week.
    David Bradley, director of foreign exchange trading at
Scotiabank, said the currency pair caught the attention of
corporate strategists as the greenback pushed above C$1.2750,
but that trade was otherwise quiet.
    The Canadian dollar was weaker against all of the major
global currencies, most noticeably the Japanese yen.
    The loonie's next major catalyst could come at the end of
this week, with both a domestic jobs report for November and
gross domestic product data for the quarter that ended in
September due on Friday. 
    "You're going to see all the algorithms kicking off those
headlines and you could see some pretty erratic moves if one's
strong and one's weak," Bradley said.
    The currency's weakest level for the session was C$1.2769,
its weakest since last Wednesday, while it traded as strong as
C$1.2681 early in the session.
    The Bank of Canada is due to release its semi-annual
Financial System Review on Tuesday, while currency strategists
are also eyeing Friday's data for clues on future Bank of Canada
monetary policy after weak retail sales numbers last week. 
    U.S. crude        prices were down 1.8 percent to $57.92 a
barrel, while Brent crude         lost 0.1 percent to $63.78.
    A report from Bank of Montreal said that Canadian GDP could
decline 1 percent over five years if the North American Free
Trade Agreement is terminated and would make all three member
economies less competitive versus Europe and Asia.              
    Canadian government bond prices were higher across the
maturity curve, with the two-year            price up 2 Canadian
cents to yield 1.430 percent and the benchmark 10-year
            rising 18 Canadian cents to yield 1.867 percent.
    The Canada-U.S. two-year bond spread widened slightly to
-31.5 basis points, while the 10-year spread widened 1.3 basis
points to -46.4 basis points.

 (Reporting by Alastair Sharp; Editing by Phil Berlowitz and
Peter Cooney)
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