October 10, 2018 / 2:03 PM / 6 days ago

CANADA FX DEBT-C$ dips as higher bond yields stress global growth prospects

    * Canadian dollar dips 0.1 percent against the greenback
    * Price of U.S. oil falls 0.6 percent
    * Canadian building permit values rise 0.4 percent in August
    * Bond prices fall across a steeper yield curve

    TORONTO, Oct 10 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Wednesday as oil prices fell and
U.S. Treasury yields climbed toward multiyear peaks.
    Investors were worried that higher bond yields and trade
conflicts could hurt global economic growth. On Tuesday, the
International Monetary Fund cut its world gross domestic product
forecasts for the first time in two years.             
    Canada's economy could suffer if global growth slows, since
it exports many commodities, including oil.
    The price of oil dropped, even as Hurricane Michael forced
the shutdown of nearly 40 percent of U.S. Gulf of Mexico oil
output and U.S. sanctions restricted Iranian exports.
            
    U.S. crude        prices dipped 0.6 percent at $74.55 a
barrel.
    At 9:41 a.m. (1341 GMT), the Canadian dollar          
traded 0.1 percent lower at 1.2966 to the greenback, or 77.12
U.S. cents. The currency traded in a range of 1.2927 to 1.2975. 
  
    The loonie has retreated 1.4 percent since notching its
strongest in more than four months last week at 1.2783 as a deal
to revamp the North American Free Trade Agreement reduced
uncertainty for Canada's economy.             
    The value of Canadian building permits increased by 0.4
percent in August from July after a downwardly revised 1.5
percent drop in the prior month, Statistics Canada said.
            
    Canadian government bond prices were lower across a steeper
yield curve in sympathy with U.S. Treasuries. The 10-year
            declined 32 Canadian cents to yield 2.609 percent.
    On Friday, the 10-year yield touched its highest in nearly
five years at 2.615 percent.
    U.S. Treasury yields advanced on Wednesday after data on
U.S. producer prices rose in September.             

 (Reporting by Fergal Smith; Editing by Jeffrey Benkoe)
  
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