December 2, 2019 / 2:17 PM / 12 days ago

CANADA FX DEBT-Loonie adds to November decline ahead of BoC rate decision

    * Canadian dollar weakens 0.1% against the greenback
    * Loonie trades in a range of 1.3275 to 1.3303
    * Price of U.S. oil increases by 1.8%
    * Canada's 10-year yield touches a near three-week high at
1.566%

    TORONTO, Dec 2 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Monday, adding to its November
decline as investors worried about a potential escalation of
global trade conflicts and awaited a Bank of Canada interest
rate decision this week.
    Stock markets reversed earlier gains after U.S. President
Donald Trump said he would restore tariffs on some imports from
Brazil and Argentina, overshadowing data showing that the
Chinese and euro zone economies were stabilizing.             
    The Bank of Canada, which is expected on Wednesday to leave
its benchmark interest rate at 1.75%, has expressed concern
about global trade uncertainty.
    The loonie has been pressured since October by a more dovish
stance from the central bank.
    At 9:04 a.m. (1404 GMT), the Canadian dollar          was
trading 0.1% lower at 1.3295 to the greenback, or 75.22 U.S.
cents. The currency, which fell 0.9% in November, traded in a
range of 1.3275 to 1.3303.    
    The price of oil, one of Canada's major exports, was
supported by hints that OPEC and its allies may agree to deepen
output cuts at a meeting this week and as rising manufacturing
activity in China suggested stronger demand.                    
    U.S. crude oil futures        were up 1.8% at $56.16 a
barrel.
    On Friday, a senior Mexican official expressed caution about
the chances of ratifying a trade agreement between the United
States, Mexico and Canada, saying more work might be needed to
overcome opposition from some U.S. Democrats.             
    Canada sends about 75% of its exports to the United States.
    Canadian government bond prices were lower across a steeper
yield curve, with the two-year            down 6.5 Canadian
cents to yield 1.621% and the 10-year             falling 77
Canadian cents to yield 1.546%.
    The 10-year yield touched its highest intraday since Nov. 13
at 1.566%.

 (Reporting by Fergal Smith
Editing by Nick Zieminski)
  
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