September 14, 2017 / 1:48 PM / 3 years ago

CANADA FX DEBT-C$ hits 1-week low as commodity currencies lose ground

    * Canadian dollar at C$1.2210, or 81.90 U.S. cents
    * Loonie touches weakest since Sept. 7 at C$1.2240
    * Bond prices lower across a flatter yield curve
    * 10-year yield hits highest intraday since October 2014

    TORONTO, Sept 14 (Reuters) - The Canadian dollar weakened on
Thursday to a one-week low against its U.S. counterpart,
tracking losses for other commodity-driven currencies even as
oil prices climbed.
    Losses for currencies such as the Canadian and Australian
dollars came as a rare flurry of disappointing data from China
suggested the world's second-largest economy is finally starting
to lose some momentum as borrowing costs rise.             
    China is a major buyer of commodities produced by countries
such as Canada and Australia.    
    U.S. crude        prices were up 1.44 percent at $50.01 a
barrel, building on recent gains after forecasts for stronger
oil demand by the International Energy Agency.             
    Oil is one of Canada's major exports.
    At 9:33 a.m. ET (1333 GMT), the Canadian dollar          was
trading at C$1.2210 to the greenback, or 81.90 U.S. cents, down
0.3 percent.
    Still, the loonie has rallied 13 percent against the
greenback since early May, boosted by a rapid expansion this
year in the Canadian economy that prompted the Bank of Canada to
raise interest rates in July, its first hike in nearly seven
years, and again last week.
    The central bank's policy rate sits at 1 percent.
    The currency's strongest level of the session was C$1.2160,
while it touched its weakest since Sept. 7 at C$1.2240 after
data showing firmer U.S. inflation briefly boosted the U.S.
    Canadian new home prices rose 0.4 percent in July from June,
slightly exceeding economists' forecasts for a gain of 0.3
percent. Vancouver saw strong demand from buyers, while prices
in Toronto were unchanged for a second straight month following
provincial measures to rein in the market, data from Statistics
Canada showed.             
    Canadian government bond prices were lower across a flatter
yield curve, with the two-year            down 2.5 Canadian
cents to yield 1.581 percent and the 10-year             dipping
2 Canadian cents to yield 2.071 percent.
    The 10-year yield touched its highest intraday since October
2014 at 2.105 percent.

 (Reporting by Fergal Smith; Editing by Meredith Mazzilli)
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