CANADA FX DEBT-C$ hits new 8-month low as oil falls; Poloz speech awaited

Published 2016-11-11, 09:36 a/m
© Reuters.  CANADA FX DEBT-C$ hits new 8-month low as oil falls; Poloz speech awaited
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* Canadian dollar at C$1.3521, or 73.96 U.S. cents

* Loonie touches its weakest since March 1 at C$1.3542

* Bond market closed for Remembrance Day

TORONTO, Nov 11 (Reuters) - The Canadian dollar weakened to a fresh eight-month low against its U.S. counterpart on Friday as oil prices fell, ahead of Bank of Canada Governor Stephen Poloz's first public comments since Donald Trump won the U.S. presidential election.

Trump has vowed to either renegotiate or scrap the North American Free Trade Agreement, under which Canada sends 75 percent of all its exports to the United States.

Still, Canadian officials have said that Canada could fall back on a free trade agreement that excludes Mexico if Trump follows through on radical protectionist policies and predicted fears of a massive economic hit are overblown. will give remarks at 9:50 a.m. EST (1450 GMT) on a panel at a conference held by the Central Bank of Chile. The topic of the panel will be "Monetary Policy and Spillovers."

Despite fears about trade, chances of an interest rate cut by mid-2017 have fallen to just one in 10, overnight index swaps data showed. The probability was more than 30 percent just one week ago. BOCWATCH

Lower chances for a Bank of Canada rate cut come as the market prices in the increased probability of a Federal Reserve rate hike in December.

U.S. crude CLc1 prices were down 2.08 percent at $43.73 a barrel as the market refocused on a persistent supply overhang that is not expected to abate unless OPEC and other producers cut their output significantly. O/R

Oil is one of Canada's major exports.

At 9:19 a.m. EST (1419 GMT), the Canadian dollar CAD=D4 was trading at C$1.3521 to the greenback, or 73.96 U.S. cents, weaker than Thursday's close of C$1.3483, or 74.17 U.S. cents.

The currency's strongest level of the session was C$1.3456, while it touched its weakest since March 1 at C$1.3542.

Canada's bond market is closed on Friday for Remembrance Day.

On Thursday, the 10-year yield touched its highest intraday since May at 1.498 percent as investors bet that Trump will enact policies that will increase inflation.

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