August 6, 2019 / 2:20 PM / in a year

CANADA FX DEBT-C$ holds near 6-week low amid escalating trade tensions

    * Canadian dollar trades near flat against the greenback
    * U.S. oil prices increase by 0.4%
    * Bond prices move higher across the yield curve

    TORONTO, Aug 6 (Reuters) - The Canadian dollar was little
changed against its U.S. counterpart on Tuesday, with the
currency hovering near a six-week low it hit on Friday as
investors worried about rising trade tensions between the United
States and China.
    A yearlong U.S.-China trade war has boiled over as
Washington accused Beijing of manipulating its currency after
China let the yuan drop to its lowest point in more than a
    Canada exports many commodities, including oil, so its
economy could be hurt by an escalation of trade tensions.
    At 10:06 a.m. (1406 GMT), the Canadian dollar          was
trading nearly unchanged at 1.3222 to the greenback, or 75.63
U.S. cents. The currency traded in a range of 1.3188 to 1.3236.
    On Friday, the currency hit its lowest intraday since June
20 at 1.3265.
    The loonie's six-week low on Friday came as data showed
Canadian exports fell by 5.1% in June, the first drop since
    Meanwhile, the price of oil rebounded slightly on Tuesday
from big falls in recent sessions amid escalating trade
tensions. U.S. crude oil futures        were up 0.4% at $54.88 a
    Canadian government bond prices were higher across the yield
curve, with the two-year            up 16 Canadian cents to
yield 1.377% and the 10-year             rising 83 Canadian
cents to yield 1.289%.
     The gap between Canada's 2-year yield and its U.S.
equivalent narrowed by 9.6 basis points to a spread of 22.2
basis points in favor of the U.S. bond, the narrowest gap since
July 8.

 (Levent Uslu; editing by Jonathan Oatis)
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