April 6, 2009 / 2:13 PM / 11 years ago

CANADA FX DEBT-C$ sags on weak oil, building permits data

 * C$ touches 80.73 U.S. cents after building permits data
 * February building permits drop 15.9 percent
 * Bond prices mixed as stocks fall
 (Adds details, quote)
 TORONTO, April 6 (Reuters) - The Canadian dollar weakened
versus the U.S. dollar on Monday morning, pressured by a drop
in the price of oil as well as lower equities and a bigger than
expected drop in Canadian building permits in February.
 A large drop in commercial and institutional building
projects helped cut the value of building permits in February
by a far greater-than-expected 15.9 percent, Statistics Canada
said. [ID:nN06293340]
 Shortly after the data, the Canadian currency fell as low
as C$1.2387 to the U.S. dollar, or 80.73 U.S. cents, before
climbing back up a bit.
 "This was extremely soft economic data for Canada. As much
as it wasn't driven by the residential side it's still pretty
shocking when you see a 16 percent drop in a single month,"
said Eric Lascelles, chief economics and rates strategist at TD
 At 9:36 a.m. (1336 GMT), the Canadian unit was at C$1.2378
to the U.S. dollar, or 80.79 U.S. cents, down from an overnight
high of C$1.2225 to the U.S. dollar, or 81.80 U.S. cents.
 It was down from Friday's session close of C$1.2304 to the
U.S. dollar, or 81.27 U.S. cents.
 Also hitting the Canadian dollar on Monday was a fall in
the oil price below $51 a barrel CLc1. Oil is a major
Canadian export and its price often dictates the currency's
 As well, the currency tracked global equity markets, which
turned flat to lower [MKTS/GLOB], with U.S. stocks pressured by
bank shares after an analyst initiated coverage on several
large banks with "underperform" or "sell" ratings.
 "Basically the theme is as usual, the market is going to
follow what happens in equity markets and use that to determine
the price direction in FX markets," said George Davis, chief
technical strategist at RBC Capital Markets.
 Canadian government bond prices were mixed as money flowed
in from equity markets but investors were cautious ahead of
another big tide of U.S. issues this week, Lascelles said.
 "From a Canadian perspective, there is certainly some
important jobs data and trade data coming up later in the
week," he added.
 The two-year Canada bond was up 2 Canadian cents to
C$100.24 to yield 1.136 percent, while the 10-year bond fell 13
Canadian cents to C$107.02 to yield 2.943 percent.
 The 30-year bond retreated 30 Canadian cents to C$123.10 to
yield 3.676 percent. In the United States, the 30-year Treasury
yielded 3.6801 percent.
 (Reporting by Frank Pingue and Jennifer Kwan; editing by Peter

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