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CANADA FX DEBT-C$ hits a 5-week low as oil prices fall

Published 2017-02-28, 09:53 a/m
© Reuters.  CANADA FX DEBT-C$ hits a 5-week low as oil prices fall
USD/CAD
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CL
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CA2YT=RR
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CA10YT=RR
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* Canadian dollar at C$1.3209, or 75.71 U.S. cents

* Loonie touches its weakest since Jan. 24 at C$1.3228

* Bond prices mixed across the maturity curve

TORONTO, Feb 28 (Reuters) - The Canadian dollar hit a five-week low against its U.S. counterpart on Tuesday as oil prices fell, while investors awaited a speech from U.S. President Donald Trump in the evening and the Bank of Canada's interest rate decision on Wednesday.

Prices of oil, one of Canada's major exports, retreated as increasing crude production from the United States offset the Organization of the Petroleum Exporting Countries-led output cuts. O/R

U.S. crude CLc1 was down 0.8 percent at $53.63 a barrel.

The Bank of Canada is widely expected to hold its policy rate at 0.5 percent.

In January, the central bank said an interest rate cut was still possible depending on risks, including "material consequences" if Trump enacts protectionist policies.

Trump's address to a joint session of Congress is expected to preview some elements of his tax and spending plans.

A border adjustment tax is part of a tax revamp proposed by House Republicans. If it is implemented, the loonie would be among the biggest losers, analysts say. are of course interested in details (of the proposed border tax), but until we have details, it is really not something that we can opine upon," Canadian Finance Bill Morneau told CNBC.

At 9:28 a.m. ET (1428 GMT), the Canadian dollar CAD=D4 was trading at C$1.3209 to the greenback, or 75.71 U.S. cents, weaker than Monday's close of C$1.3163, or 75.97 U.S. cents.

The currency's strongest level of the session was C$1.3164, while it touched its weakest since Jan. 24 at C$1.3228.

In domestic data, producer prices rose in January for the fifth straight month, gaining 0.4 percent from December on increases for energy and petroleum products, Statistics Canada said. government bond prices were mixed across the yield curve, with the two-year CA2YT=RR flat to yield 0.763 percent and the 10-year CA10YT=RR rising 5 Canadian cents to yield 1.643 percent.

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