August 14, 2019 / 2:28 PM / 2 months ago

CANADA FX DEBT-C$ hits 1-week low as investors fret about global growth outlook

    * Canadian dollar falls 0.6% against the greenback
    * U.S. oil prices decrease by 3.6%
    * Bond prices move higher across a flatter yield curve
    * Canada's curve inverts by the most in nearly two decades

    TORONTO, Aug 14 (Reuters) - The Canadian dollar weakened to
a one-week low against its U.S. counterpart on Wednesday as oil
prices dropped and investors worried about the global growth
outlook.
    At 9:51 a.m. (1351 GMT), the Canadian dollar          was
trading 0.6% lower at 1.3304 to the greenback, or 75.17 U.S.
cents. The currency touched its weakest intraday level since
last Wednesday at 1.3316.
    U.S. stocks fell as a closely watched bond market indicator
pointed to a renewed risk of recession, undoing gains from the
previous session due to a retreat by Washington on its latest
tariffs on Chinese goods.             
    Canada exports many commodities, including oil, so its
economy could be hurt by a slowdown in the global economy. 
    Oil prices fell on weak economic data from China and Europe
and a rise in U.S. crude inventories. U.S. crude        prices
were down 3.56% at $55.03 a barrel.             
    China reported weaker-than-expected economic data for July,
including a surprise drop in industrial output growth to a more
than 17-year low, while a slump in exports sent Germany's
economy into reverse in the second quarter.
                                 
    Canadian government bond prices were higher across a flatter
yield curve in sympathy with U.S. Treasuries. The two-year
           rose 9.5 Canadian cents to yield 1.334% and the
10-year             climbed 84 Canadian cents to yield 1.156%.
    The 10-year yield fell 3.8 basis points further below the
2-year yield to a spread of -17.8 basis points, the curve's
largest inversion since June 2000. An inverted curve is seen by
some investors as a harbinger of recession.

 (Reporting by Levent Uslu; editing by Jonathan Oatis)
  
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