May 2, 2019 / 1:48 PM / 6 months ago

CANADA FX DEBT-C$ dips as oil prices slide on record U.S. production

    * Canadian dollar dips 0.1% against the greenback
    * Price of U.S. oil falls 2.5%
    * Canadian bond prices decline across yield curve

    TORONTO, May 2 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Thursday as oil prices fell, but
the currency traded in a narrow range after pulling back from an
eight-day high reached during Wednesday's session. 
    The price of oil, one of Canada's major exports, was
pressured by record U.S. crude production that led to a surge in
inventories. U.S. crude oil futures        were down 2.50% at
$62.01 a barrel.             
    At 9:10 a.m. (1310 GMT), the Canadian dollar          was
trading 0.1% lower at 1.3461 to the greenback, or 74.29 U.S.
cents.
    The currency, which touched its strongest intraday level in
more than one week on Wednesday at 1.3378, traded in a range of
1.3430 to 1.3463 as investors awaited U.S. jobs data on Friday.
    On Wednesday, the loonie pulled back from its strongest
intraday level in more than one week at 1.3378, as the Federal
Reserve tempered expectations for an interest rate cut this year
and after domestic data for April showed auto sales dropped 3.5
percent and factory activity contracted for the first time in
more than three years.
    Still, Bank of Canada Governor Stephen Poloz said interest
rates would rise from their current "very low" levels if
headwinds affecting the Canadian economy were to dissipate.
            
    China has suspended pork imports from two Canadian
companies, according to an interview with Canada's agricultural
minister and a Chinese customs document, marking the latest
irritant in a widening diplomatic dispute.              
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries. The two-year           
fell 4 Canadian cents to yield 1.593% and the 10-year
            declined 13 Canadian cents to yield 1.716%.

 (Reporting by Fergal Smith; Editing by Bernadette Baum)
  
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