November 1, 2017 / 1:29 PM / 3 years ago

CANADA FX DEBT-C$ hovers near 3-month low ahead of Fed rate decision

    * Canadian dollar at C$1.2905, or 77.49 U.S. cents
    * Bond prices lower across yield curve
    * U.S. crude prices rise nearly 1 percent

    TORONTO, Nov 1 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Wednesday, hovering near a
three-month low hit last week, as investors braced for an
interest rate decision from the Federal Reserve.
    The loonie has fallen 6.5 percent since early September,
pressured by a more dovish tone from the Bank of Canada after it
hiked rates in July and September for the first time in seven
    On Tuesday, data showed a surprise contraction in the
Canadian economy in August and Bank of Canada Governor Stephen
Poloz said Canada is at a "crucial" spot in the economic cycle
with significant uncertainties clouding the way forward.
    The central bank's caution has overshadowed a nearly
10-month high for the price of oil, one of Canada's major
    U.S. crude        prices were up 0.97 percent to $54.91 a
barrel as data showed OPEC has significantly improved compliance
with its pledged supply cuts and Russia is also widely expected
to keep to the deal.             
    The U.S. dollar        climbed against a basket of major
currencies ahead of the Fed decision.
    The U.S. central bank is expected to keep rates unchanged as
speculation swirls on who will be its next leader, but will
likely point to a firming economy as it edges closer to a
possible rate increase next month.             
    At 9:08 a.m. ET (1308 GMT), the Canadian dollar          was
trading at C$1.2905 to the greenback, or 77.49 U.S. cents, down
0.1 percent.
    The currency traded in a range of C$1.2872 to C$1.2908. On
Friday, it touched its weakest in more than three months at
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries after data showed U.S.
companies added the most workers in seven months in October, and
as corporate earnings helped boost Wall Street shares.
    The two-year            fell 2 Canadian cents to yield 1.403
percent and the 10-year             declined 14 Canadian cents
to yield 1.969 percent.

 (Reporting by Fergal Smith; Editing by Meredith Mazzilli)
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