* C$ falls to 98.62 U.S. cents
* Canadian bond prices track U.S. Treasuries higher
TORONTO, Nov 16 (Reuters) - The Canadian dollar retreated against the U.S. currency to its lowest in two weeks, partly on weak commodity prices and as equity markets were pressured by lingering concerns about sovereign debt in Europe.
Oil fell below $84 a barrel, while copper prices were weighed by worries top metals user China plans further steps to cool down its overheated economy. [MKTS/GLOB]
World stocks fell for the seventh straight session on Tuesday on persistent worries over Ireland’s debt problems, although Dublin resisted pressure to seek a state bailout by signalling that its banks may need help. [ID:nLDE68T0MG]
Greece promised on Monday to stick to its deficit cutting plan while its prime minister said Germany’s tough stance may push debt-laden European nations such as Portugal and Ireland to bankruptcy.
At 8:05 a.m. (1305 GMT), the Canadian dollar CAD=D4 was at C$1.0140 to the U.S. dollar, or 98.62 U.S. cents, down from C$1.0089 to the U.S. dollar, or 99.12 U.S. cents, at Monday’s close.
The currency fell as low as C$1.0169 to the U.S. dollar, or 98.34 U.S. cents, before recovering a bit.
“We did see some weakness but things are coming back a little bit now but it’s generally underperforming,” said Sacha Tihanyi, currency strategist at Scotia Capital.
Investors will take a look at Canada’s manufacturing data for September, which is expected to show a decline of 0.8 percent after a 2 percent advance in the prior month. ECONCA
The data will be an important contributor to quarterly growth forecasts. It will also influence when the Bank of Canada may return to its interest rate hike campaign. Most expect a resumption of rate hikes next year, although opinions are mixed on the timing.
In a Reuters poll last month, only five of the country’s 12 primary dealers saw interest rate hikes resuming in the first quarter of 2011. [CA/POLL]
Canadian government bond prices rebounded on Tuesday, following a similar trend in U.S. Treasuries, as North American equity markets looked set to carry on the weakness from overseas markets.
The two-year bond CA2YT=RR rose 5 Canadian cents to yield 1.61 percent, while the 10-year bond CA10YT=RR gained 28 Canadian cents to yield 3.111 percent.
Reporting by Ka Yan Ng, Editing by Chizu Nomiyama