February 28, 2019 / 3:39 PM / 8 months ago

CANADA FX DEBT-C$ weakens as current account gap widens, stocks fall

    * Canadian dollar falls 0.3 percent against the greenback
    * Canada's current account deficit widens to C$15.48 billion
in Q4
    * Price of U.S. oil rises 0.2 percent
    * Canadian bond prices trade mixed across the yield curve

    TORONTO, Feb 28 (Reuters) - The Canadian dollar lost ground
against its U.S. counterpart on Thursday as domestic data showed
a wider current account deficit and after global stocks were
pressured after talks between the United States and North Korea
ended without a nuclear deal.
    Canada's current account deficit widened to C$15.48 billion
in the fourth quarter from a revised C$10.11 billion deficit in
the third quarter as a sharp drop in energy prices triggered a 
higher deficit on trade goods, data from Statistics Canada
showed.             
    The Bank of Canada, which is widely expected to leave its
benchmark interest rate on hold at 1.75 percent when it decides
on policy next week, said in January that low oil prices harmed
the economy in the fourth quarter of 2018 and will continue to
do so in the first quarter of this year.             
    Oil is one of Canada's major exports.
    At 10:09 a.m. EST (1509 GMT), the Canadian dollar         
was trading 0.3 percent lower at 1.3192 to the greenback, or
75.80 U.S. cents. The currency, which touched on Monday its
strongest in nearly three weeks at 1.3113, traded in a range of
1.3143 to 1.3206.    
    Wall Street's main indexes opened slightly lower after a
U.S.-North Korea summit ended abruptly without a deal, but
losses were limited as data showed the American economy slowed
less than expected in the fourth quarter.             
    In contrast, factory activity in China contracted to a
three-year low in February as export orders fell at the fastest
pace since the global financial crisis, highlighting deepening
cracks in an economy facing weak demand at home and abroad.
    Signs that China's economy is slowing pressured the price of
oil. Still, oil clawed back its earlier losses, with U.S. crude
oil futures        up 0.2 percent at $57.06 a barrel.
                
    Separate data from Statistics Canada showed that producer
prices fell by 0.3 percent in January from December on lower
prices for energy and petroleum products. Analysts had expected
a 0.1 percent increase in industrial prices.             
    Canada's fourth-quarter gross domestic product data is due
on Friday.
    Canadian government bond prices were mixed across the yield
curve, with the two-year            up 1 Canadian cent to yield
1.769 percent and the 10-year             falling 9 Canadian
cents to yield 1.925 percent.

 (Reporting by Fergal Smith)
  
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