November 9, 2018 / 3:46 PM / in 2 years

CANADA FX DEBT-C$ hits 2-month low on oil price fall, pipeline setback

    * Canadian dollar falls 0.3 percent against the greenback
    * Price of U.S. oil falls 1.2 percent
    * Loonie touches its weakest since Sept. 6 at 1.3202
    * Canadian bond prices rise across a flatter yield curve

    TORONTO, Nov 9 (Reuters) - The Canadian dollar weakened to a
two-month low against the greenback on Friday as oil prices
extended recent declines, and after a court ruling that could
delay construction of a major pipeline carrying heavy crude from
Canada to the United States. 
     A U.S. judge in Montana late on Thursday halted
construction of the Keystone XL pipeline, throwing another
obstacle in the path of the project that has been in development
for a decade.             
    The price of oil, one of Canada's major exports, fell to
multi-month lows as global supply increased and investors
worried about the impact on fuel demand of lower economic growth
and trade disputes. U.S. crude        prices were down 1.2
percent at $59.97 a barrel.             
    At 10:28 a.m. (1528 GMT), the Canadian dollar          was
trading 0.3 percent lower at 1.3190 to the greenback, or 75.82
U.S. cents. The currency hit its weakest level since Sept. 6 at
    Losses for the loonie came as weak Chinese data raised
concerns about global growth, pressuring stocks on Wall Street.
    Canada runs a current account deficit, so its economy could
be hurt if the flow of trade or capital slows.
    The U.S. dollar rose towards a 16-month high after the U.S.
Federal Reserve kept interest rates steady and reaffirmed its
monetary tightening stance, cueing up investors for a rate hike
in December.             
    Canadian government bond prices were higher across a flatter
yield curve in sympathy with U.S. Treasuries. The two-year
           rose 2.5 Canadian cents to yield 2.343 percent and
the 10-year             climbed 21 Canadian cents to yield 2.513

 (Reporting by Fergal Smith
Editing by Susan Thomas)
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