November 30, 2017 / 9:55 PM / 3 years ago

CANADA FX DEBT-C$ hits 4-week low as oil prices gyrate on OPEC decision

 (Adds analyst quotes and details throughout, updates prices)
    * Canadian dollar at C$1.2902, or 77.51 U.S. cents
    * Loonie touches its weakest since Nov. 1 at C$1.2909
    * Bond prices mixed across the yield curve
    * Canada-U.S. 2-year spread hits widest since June 27

    By Fergal Smith
    TORONTO, Nov 30 (Reuters) - The Canadian dollar weakened to
a four-week low against its U.S. counterpart on Thursday as oil
prices gyrated and data showed a widening in the country's
current account deficit.
    Canada's current account deficit swelled in the third
quarter to C$19.35 billion, the third largest in history, as the
country's international trade gap in goods continued to expand.
    "The current account numbers were a reminder of a long term
headwind for the Canadian economy," said Adam Button, currency
analyst at ForexLive in Montreal. 
    "The Canadian dollar was whipped around by uncertainty on
the OPEC decision and the U.S. tax bill," Button said.
    U.S. crude        prices clawed back earlier losses to
settle up 0.2 percent at C$57.40 a barrel after OPEC and
non-OPEC producers led by Russia agreed to extend output cuts
until the end of 2018.             
    Oil is one of Canada's major exports.
    U.S. Treasury yields rose on optimism about U.S. tax
overhaul efforts, but the greenback        pared some of this
week's gains against a basket of major currencies.             
    At 4 p.m. (2100 GMT), the Canadian dollar          was
trading at C$1.2902 to the greenback, or 77.51 U.S. cents, down
0.3 percent.
    The currency's strongest level of the session was C$1.2851,
while it touched its weakest since Nov. 1 at C$1.2909.
    For the month, the loonie dipped 0.1 percent.
    Separate domestic data showed that Canadian average weekly
earnings rose 1 percent in September from August.
    Data on Canada's jobs for November and gross domestic
product for the quarter will be released on Friday. That could
help guide expectations for next week's interest rate decision
by the Bank of Canada.
    The central bank raised rates in July and September for the
first time in seven years but has since turned more cautious on
the outlook for the economy.
    Canadian government bond prices were mixed across the yield
curve, with the two-year            up 1 Canadian cent to yield
1.431 percent and the 10-year             falling 7 Canadian
cents to yield 1.889 percent.
    The gap between Canada's 2-year yield and its U.S.
equivalent widened by 3.3 basis points to a spread of -35.9
basis points, its widest since June 27.

 (Reporting by Fergal Smith; Editing by Meredith Mazzilli and
Peter Cooney)
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