November 28, 2017 / 9:47 PM / 3 years ago

CANADA FX DEBT-C$ hits 1-week low against stronger greenback as oil dips

 (Adds analyst quotes and details, updates prices)
    * Canadian dollar at C$1.2815, or 78.03 U.S. cents
    * Loonie hits weakest since Nov. 21 at C$1.2825
    * Bond prices higher across a flatter yield curve
    * 10-yr yield hits lowest since Aug. 29 at 1.805 pct

    By Fergal Smith
    TORONTO, Nov 28 (Reuters) - The Canadian dollar weakened to
a one-week low against its U.S. counterpart on Tuesday as oil
prices dipped and the greenback broadly climbed.
    The U.S. dollar        rose against a basket of major
currencies, boosted by a 17-year high for U.S. consumer
confidence in November and the prospect of tax cuts.
    "We have had progress on the U.S. tax reform agenda," said
Eric Theoret, currency strategist at Scotiabank. "It's a broad
rally in the U.S. dollar on this optimism."
    Prices of oil, one of Canada's major exports, were weighed
by uncertainty over the outcome of an OPEC meeting this week at
which an extension to its price-supporting output cuts will be
    U.S. crude oil futures        settled 0.2 percent lower at
$57.99 a barrel.
    At 4 p.m. ET (2100 GMT), the Canadian dollar          was
trading at C$1.2815 to the greenback, or 78.03 U.S. cents, down
0.4 percent.
    The currency's strongest level of the session was C$1.2756,
while it touched its weakest since Nov. 21 at C$1.2825.
    Vulnerabilities created by Canada's high household debt and
hot housing market remain elevated but should ease over time as
a stronger economy and tighter mortgage requirements help
improve conditions, the Bank of Canada said.             
    Canadian government bond prices were higher across a flatter
yield curve, with the two-year            up 4 Canadian cents to
yield 1.419 percent and the 10-year             rising 41
Canadian cents to yield 1.84 percent.
    The 10-year yield touched its lowest since Aug. 29 at 1.805
percent, while the gap between the 10-year yield and its U.S.
equivalent widened by 4.9 basis points to a spread of -48.8
basis points.
    Data will be released Friday on Canada's jobs for November
and gross domestic product for the quarter.

 (Reporting by Fergal Smith; Editing by Bernadette Baum)
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