January 29, 2020 / 3:26 PM / 5 months ago

CANADA FX DEBT-Canadian dollar nears 7-week low as oil prices fall

    * Canadian dollar weakens 0.3% against the greenback
    * Loonie trades in a range of 1.3156 to 1.3195
    * Price of U.S. oil decreases 0.7%
    * Canadian bond yields fall across a flatter yield curve

    TORONTO, Jan 29 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Wednesday as oil prices fell and
investors awaited a Federal Reserve interest rate decision, with
the loonie nearing a multiweek low it hit the previous day.
    The price of oil, one of Canada's major exports, has been
pressured in recent days by concern that China's coronavirus
outbreak could hurt the global economy, weakening demand. U.S.
crude oil futures        fell 0.7% to $53.12 a barrel.
    The Fed is not expected to change interest rates when it
gives its decision at 2 p.m. EST (1900 GMT), but investors will
want to hear whether the U.S. central bank's chairman, Jerome
Powell, retains his cautiously upbeat language.             
    At 10:03 a.m. (1503 GMT), the Canadian dollar          was
trading 0.3% lower at 1.3191 to the greenback, or 75.81 U.S.
cents. The currency, which on Tuesday hit a near seven-week low
at 1.3206, traded in a range of 1.3156 to 1.3195.
    U.S. President Donald Trump will sign a new North American
trade agreement on Wednesday in a ceremony at the White House.
Canada sends about 75% of its exports to the United States.
                    
    Canada's gross domestic product data for November is due on
Friday, which could help guide expectations for a Bank of Canada
interest rate cut.
    Last week, the central bank left its benchmark interest rate
steady at 1.75%, as expected, but said a future cut was possible
should a recent slowdown in domestic growth persist.
            
    Canadian government bond yields fell across a flatter yield
curve in sympathy with U.S. Treasuries. The 10-year yield, which
on Tuesday hit a near four-month low intraday at 1.283%, was
down 3.5 basis points at 1.340%.

 (Reporting by Fergal Smith and Jonathan Oatis)
  
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