November 23, 2018 / 2:38 PM / 2 years ago

CANADA FX DEBT-C$ weakens as oil price slide offsets domestic data

    * Canadian dollar falls 0.3 percent against the greenback
    * Canadian inflation holds above 2 percent for ninth month
    * Price of U.S. oil falls 6.2 percent
    * Canadian bond prices rise across a flatter yield curve

    TORONTO, Nov 23 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Friday, as a further slide in
the price of oil offset domestic data showing above target
inflation and increased retail sales.
    At 9:20 a.m. (1420 GMT), the Canadian dollar          was
trading 0.3 percent lower at 1.3238 to the greenback, or 75.54
U.S. cents.
    The currency, which on Tuesday touched its weakest in nearly
five months at 1.3318, traded in a range of 1.3185 to 1.3259.
    Canada's annual inflation rate remained above the central
bank's target of 2 percent for the ninth straight month in
October, data showed, but markets saw few signs the Bank of
Canada would hike interest rates next month.             
    Chances of a rate increase in December held at about 23
percent after the data, the overnight index swaps market
    In separate data, the value of Canadian retail trade rose by
0.2 percent in September from August, while volumes increased by
0.5 percent.    
    The price of oil, one of Canada's major exports, fell to its
lowest in more than a year, on course for its biggest one-month
decline since late 2014, even as oil producers considered
cutting production to try to stem a rising global surplus.
    U.S. crude        prices were down 6.2 percent at $51.25 a
    Stocks were pressured by the slide in oil prices and
investor nervousness ahead of U.S.-China trade talks at the G20
summit next week.             
    In addition to being a major oil exporter, Canada runs a
current account deficit. Its economy could be hurt if the global
flow of trade or capital slows.
    Canadian government bond prices were higher across a flatter
yield curve, with the two-year            up 3.8 Canadian cents
to yield 2.224 percent and the 10-year             rising 27
Canadian cents to yield 2.337 percent.
    The gap between Canada's 10-year yield and its U.S.
equivalent widened by 1.2 basis points to a spread of 70.4 basis
points in favor of the U.S. bond.

 (Reporting by Fergal Smith
Editing by Susan Thomas)
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