August 15, 2017 / 1:44 PM / 4 months ago

CANADA FX DEBT-C$ hits 1-month low as oil prices fall, greenback climbs

    * Canadian dollar at C$1.2758, or 78.38 U.S. cents
    * Loonie touches its weakest since July 12 at C$1.2778
    * Bond prices lower across a steeper yield curve

    TORONTO, Aug 15 (Reuters) - The Canadian dollar hit a
one-month low against its U.S. counterpart on Tuesday, pressured
by lower oil prices and broader gains for the greenback, as
North Korea tensions eased and data showed a jump in U.S. retail
sales.
    The U.S. dollar        climbed against a basket of major
currencies after North Korea's leader delayed a decision on
firing missiles towards Guam. Also aiding the greenback, U.S.
retail sales recorded their biggest increase in seven months in
July.                         
    Oil prices extended a heavy sell-off, weighed down by a
stronger U.S. dollar and signs of weaker demand in
China.            
    U.S. crude        prices were down 0.53 percent to $47.34 a
barrel.
    At 9:17 a.m. ET (1317 GMT), the Canadian dollar          was
trading at C$1.2758 to the greenback, or 78.38 U.S. cents, down
0.3 percent.
    The currency's strongest level of the session was C$1.2720,
while it touched its weakest since July 12 at C$1.2778.
    Resales of Canadian homes fell 2.1 percent in July from
June, the fourth straight monthly decline, as the cooling down
of the Toronto housing market continued, the Canadian Real
Estate Association said.                 
    Separate data showed that lending to Canadian small
businesses rose for a fifth straight month in June on stronger
activity in construction and other major industries, suggesting
that companies are adding to solid growth in the domestic
economy.             
    Canadian government bond prices were lower across a steeper
yield curve in sympathy with U.S. Treasuries. The two-year
           price fell 7 Canadian cents to yield 1.261 percent,
and the 10-year             declined 64 Canadian cents to yield
1.953 percent.
    Investors are awaiting Canada's inflation data for July on
Friday to see whether the numbers will support a potential
second interest rate hike from the Bank of Canada later this
year.         
    The central bank hiked rates last month for the first time
in nearly seven years.
    Negotiations for modernizing the North American Free Trade
Agreement (NAFTA) start on Wednesday. The Canadian government's
goals in the talks include preserving NAFTA's dispute-settlement
mechanism, Foreign Minister Chrystia Freeland said on Monday,
setting up a potential clash with Washington.             

 (Reporting by Fergal Smith; Editing by W Simon)
  
 

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