June 19, 2018 / 1:19 PM / 2 years ago

CANADA FX DEBT-C$ drops to near one-year low amid global trade tensions

    * Canadian dollar at C$1.3270, or 75.36 U.S. cents
    * Loonie hits weakest in nearly one year at C$1.3291
    * The price of U.S. oil falls 1.6 percent
    * Bond prices higher across a flatter yield curve

    TORONTO, June 19 (Reuters) - The Canadian dollar weakened to
a nearly one-year low against its U.S. counterpart on Tuesday as
an escalating trade dispute between the United States and China
pressured global stock and commodity markets. 
    Equity and oil prices fell after U.S. President Donald Trump
on Monday threatened to impose a 10 percent tariff on $200
billion of Chinese goods, which Beijing warned it would fight
back against with "qualitative" and "quantitative" measures.
    Investors have been concerned the trade spat between the two
economic giants could slow global growth.
    U.S. crude        prices were down 1.6 percent at $64.82 a
barrel. Oil is one of Canada's major exports.
    Canada runs a current account deficit, so its currency tends
to weaken when risk appetite sours. The country has its own
trade feud with the United States and is in slow-moving talks
with the U.S. and Mexico to revamp the North American Free Trade
    At 9:04 a.m. EDT (1304 GMT), the Canadian dollar         
was trading 0.5 percent lower at C$1.3270 to the greenback, or
75.36 U.S. cents. The currency touched its weakest level since
June 23, 2017 at C$1.3291.   
    Canadian government bond prices were higher across a flatter
yield curve in sympathy with Treasuries as the trade spat lifted
demand for safe-haven assets.
    The two-year            rose 5 Canadian cents to yield 1.846
percent and the 10-year             climbed 42 Canadian cents to
yield 2.155 percent.
    The 10-year yield touched its lowest intraday since April 11
at 2.146 percent.
    Canadian inflation data for May and the April retail sales
report are due out on Friday.

 (Reporting by Fergal Smith; Editing by Bernadette Baum)
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