January 19, 2018 / 2:32 PM / 2 years ago

CANADA FX DEBT-C$ dips as lower oil prices offset robust factory data

    * Canadian dollar at C$1.2444, or 80.36 U.S. cents
    * Oil price slides 1.1 percent
    * Bond prices edge higher across much of the yield curve
    * 10-year yield posts a three-year high intraday at 2.237

    TORONTO, Jan 19 (Reuters) - The Canadian dollar dipped
against its U.S. counterpart on Friday as lower prices of oil,
one of Canada's major exports, offset domestic data showing the
biggest increase in manufacturing sales in 2-1/2 years.
    Canadian manufacturing sales jumped 3.4 percent in November
on strength in transportation equipment and petroleum and coal
products, Statistics Canada said. Analysts in a Reuters poll had
forecast a 2.0 percent gain.             
    U.S. crude        prices were down 1.1 percent at $63.22 a
barrel as a bounce-back in U.S. production outweighed ongoing
declines in crude inventories.             
    At 9:15 a.m. EST (1415 GMT), the Canadian dollar         
was trading 0.2 percent lower at C$1.2444 to the greenback, or
80.36 U.S. cents.
    The currency traded in a range of C$1.2400 to C$1.2453. It
is on course to rise 0.1 percent for the week.
    On Wednesday, the Bank of Canada raised its benchmark
interest rate by 25 basis points to 1.25 percent, its highest
since January 2009, after recent data showed stronger inflation
and strong job growth.
    But expectations for additional rate hikes over the coming
months were tempered after the central bank said the future of
the North American Free Trade Agreement was the most significant
downside risk the economy faced.
    Talks in Montreal later this month to update NAFTA will be
extended by one day, officials said on Thursday, as Mexico and
the United States exchanged barbs.                 
     Foreign investment in Canadian securities, particularly
bonds, remained strong in November and was on track to hit an
annual record, separate data showed.             
    Canadian government bond prices were slightly higher across
much of the yield curve, with the two-year            up 1.5
Canadian cents to yield 1.804 percent and the 10-year
            rising 3 Canadian cents to yield 2.219 percent.
    The 10-year yield touched its highest intraday since
September 2014 at 2.237 percent.    

 (Reporting by Fergal Smith; Editing by Phil Berlowitz)
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