August 28, 2019 / 1:58 PM / 2 months ago

CORRECTED-CANADA FX DEBT-C$ dips amid Brexit uncertainty, U.S. recession fears

 (Corrects 7th paragraph to reflect upcoming GDP data will be
for second quarter not third quarter)
    * Canadian dollar falls 0.1% against the greenback
    * Price of U.S. oil increases 2.6%
    * Canadian bond prices rise across the yield curve

    TORONTO, Aug 28 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Wednesday, extending its
pullback from a near two-week high the previous day, as the
greenback broadly rose and investors worried about the global
economic outlook.
    The U.S. dollar        rose against a basket of currencies
as British Prime Minister Boris Johnson's move to limit
parliament's opportunity to derail his Brexit plans weighed on
sterling.             
    U.S. stocks declined after moves in the U.S. bond market
brought back fears of a recession as the trade war between the
United States and China drags on.             
    Canada exports many commodities, including oil, so its
economy could be hurt by a slowdown in the global economy.      
 
    U.S. crude        prices were up 2.6% at $56.34 a barrel
after industry data showing a fall in stockpiles of U.S. crude
somewhat eased worries about subdued demand due to the
U.S.-China trade war.
    At 9:39 a.m. (1339 GMT), the Canadian dollar          was
trading 0.1% lower at 1.3302 to the greenback, or 75.18 U.S.
cents. The currency, which notched on Tuesday its strongest
intraday level since Aug. 14 at 1.3225, traded in a range of
1.3282 to 1.3319.
    The decline for the loonie came ahead of the release on
Friday of Canada's second-quarter gross domestic product data,
which could help guide expectations for next week's Bank of
Canada interest rate decision.
    Money markets expect the central bank to ease rates by the
end of the year.           
    Canadian government bond prices were higher across the yield
curve in sympathy with U.S. Treasuries. The two-year           
rose 3.5 Canadian cents to yield 1.32% and the 10-year
            was up 11 Canadian cents to yield 1.113%.

 (Reporting by Fergal Smith; Editing by David Gregorio)
  
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