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CANADA FX DEBT-C$ at weakest in 2 weeks as oil fall offsets trade data

Published 2017-02-07, 09:37 a/m
© Reuters.  CANADA FX DEBT-C$ at weakest in 2 weeks as oil fall offsets trade data
USD/CAD
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CA10YT=RR
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* Canadian dollar at C$1.3170, or 75.93 U.S. cents

* Bond prices lower across the maturity curve

TORONTO, Feb 7 (Reuters) - The Canadian dollar hit its weakest level in two weeks against its U.S. counterpart on Tuesday as a fall in oil prices offset data showing the country notched a second straight trade surplus for the first time in more than two years.

Prices for oil, a major Canadian export, were down more than 1 percent in morning trade as growing evidence of a revival in U.S. shale production offset lower output by OPEC and other exporters. O/R

At 9:24 a.m. ET (1424 GMT), the Canadian dollar CAD=D4 was trading at C$1.3170 to the greenback, or 75.93 U.S. cents, weaker than the Bank of Canada's close on Monday of C$1.3087, or 76.41 U.S. cents.

Canada posted a C$923 million trade surplus in December, thanks largely to booming crude oil exports, Statistics Canada said. November's surplus was also revised sharply higher. while overall exports rose by 0.8 percent in December, export volumes actually fell by 1.4 percent.

Meanwhile the U.S. trade deficit fell more than expected in December, including a big decline in its deficit with Canada, as exports rose to their highest level in more than 1-1/2 years, outpacing an increase in imports. loonie's strongest level of the session was C$1.3076, while its weakest level was C$1.3213.

U.S. crude CLc1 prices were down 1.62 percent to $52.15 a barrel, while Brent LCOc1 lost 1.60 percent to $54.83. O/R

The recent upsurge in the Canadian dollar will peter out over the coming months as an expected widening gap between steady interest rates in Canada and rising U.S. rates eclipses higher oil prices, a Reuters poll found. government bond prices were lower across the maturity curve, with the two-year CA2YT=RR price down 1.5 Canadian cents to yield 0.745 percent and the benchmark 10-year CA10YT=RR falling 9 Canadian cents to yield 1.711 percent.

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