January 28, 2020 / 2:57 PM / 4 months ago

CANADA FX DEBT-C$ holds near 7-week low as China virus threatens economic growth

    * Canadian dollar trades near flat against the greenback
    * Loonie touches its lowest intraday level since Dec. 11 at
1.3206
    * Price of U.S. oil falls 0.3%
    * Canada's 10-year yield hits its lowest in more than three
months

    TORONTO, Jan 28 (Reuters) - The Canadian dollar was little
changed against the greenback on Tuesday, holding close to its
weakest level in nearly seven weeks as investors worried that
China's spreading coronavirus would drag on global economic
activity.
    Canada is a major exporter of commodities, including oil, so
its economy could be hurt by a slowdown in the global economy.
    U.S. crude oil futures        were down 0.3% at $52.99 a
barrel amid fears that the coronavirus, which has claimed over
100 lives in China, might weigh on oil demand.             
    At 9:44 a.m. (1444 GMT), the Canadian dollar          was
trading nearly unchanged at 1.3189 to the greenback, or 75.82
U.S. cents. The currency touched its weakest intraday level
since Dec. 11 at 1.3206.
    On Monday, Canada's minority Liberal government kicked off
the ratification process for the United States-Mexico-Canada
Agreement (USMCA) trade pact and urged opposition lawmakers to
formally approve the deal as quickly as possible. Canada sends
about 75% of its exports to the United States.                 
    Canada's gross domestic product data for November is due on
Friday, which could help guide expectations for a Bank of Canada
interest rate cut.
    Last week, the central bank left its benchmark interest rate
steady at 1.75%, as expected, but said a future cut was possible
should a recent slowdown in domestic growth persist.
            
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries. The two-year           
fell 2.9 Canadian cents to yield 1.458% and the 10-year
            was down 8.8 Canadian cents to yield 1.314%.
    The 10-year yield touched its lowest intraday level since
Oct. 8 at 1.283%.

 (Reporting by Fergal Smith; editing by Jonathan Oatis)
  
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