October 9, 2018 / 2:11 PM / 2 years ago

CANADA FX DEBT-C$ weakens as outlook dims for global growth

    * Canadian dollar weakens 0.2 percent against the greenback
    * Domestic housing starts unexpectedly fell in September
    * Price of U.S. oil rises 0.6 percent
    * Canadian bond prices edge higher

    TORONTO, Oct 9 (Reuters) - The Canadian dollar lost ground
against its U.S. counterpart on Tuesday as the greenback broadly
strengthened and the International Monetary Fund cut its
forecast for global economic growth in 2018 and 2019.
    The IMF said that the U.S-China trade war was taking a toll
and emerging markets were struggling with tighter liquidity and
capital outflows.             
    Canada's economy could suffer if global growth slows, since
it exports many commodities, including oil.
    Seven-year highs for U.S. Treasury yields helped boost the
greenback against a basket of other major currencies, while
concerns over Italy's budget pressured the euro.             
    At 9:39 a.m. (1339 GMT), the Canadian dollar          was
trading 0.2 percent lower at 1.2989 to the greenback, or 76.99
U.S. cents.
    The currency, which on Monday touched its weakest intraday
in more than one week at 1.3010 to the dollar, traded in a range
of 1.2953 to 1.3004.
    The loonie's decline came as data from the Canadian Mortgage
and Housing Corp showed a surprise drop in domestic housing
starts to a seasonally adjusted annualized rate of 188,683 units
in September from a revised 198,843 units in August.
    The price of oil rose on growing evidence of falling crude
exports from Iran before the imposition of new U.S. sanctions.
U.S. crude        prices were up 0.6 percent at $74.72 a barrel.
    On Monday, Irving Oil Corp shut its 320,000 barrel-per-day
refinery in Saint John, New Brunswick, after an explosion and a
major fire that followed.                     
    The loonie declined 0.3 percent last week despite a deal to
revamp the North American Free Trade Agreement and data on
Friday showing a jump in domestic jobs.             
    Canadian government bond prices edged higher as the domestic
debt market reopened following the Thanksgiving Day holiday on
Monday. The 10-year             rose 9 Canadian cents to yield
2.591 percent.
    On Friday, the 10-year yield touched its highest intraday
since January 2014 at 2.615 percent.

 (Reporting by Fergal Smith; Editing by Steve Orlofsky)
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