CANADA FX DEBT-C$ weakens after inflation slip, China rate cut

Published 2015-10-23, 09:35 a/m
© Reuters.  CANADA FX DEBT-C$ weakens after inflation slip, China rate cut
LCO
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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$1.3184, or 75.85 U.S. cents
* Bond prices lower across the maturity curve

By Alastair Sharp
TORONTO, Oct 23 (Reuters) - The Canadian dollar weakened to
a fresh three-week low against its U.S. counterpart on Friday
after domestic inflation data slipped more than expected and
China cut interest rates to spur growth in its slowing economy.
Canada's annual inflation rate dipped to 1.0 percent in
September on lower prices for gasoline, marking the 10th
straight month it has been below the Bank of Canada's 2.0
percent target, Statistics Canada said on Friday.
A Reuters poll of analysts had predicted the annual rate
would be 1.1 percent in September, following August's 1.3
percent rate.
"The softer number is going to put pricing pressure on the
Canadian dollar," said Benjamin Reitzes, senior economist at BMO
Capital Markets.
Meanwhile, China's central bank cut rates for the sixth time
since November and again lowered reserve requirements for its
banks.
* At 9:19 a.m. ET (1319 GMT), the Canadian dollar
was trading at C$1.3184 to the greenback, or 75.85 U.S. cents,
weaker than Thursday's close of C$1.3107, or 76.30 U.S. cents.
* At one point it touched C$1.3190, its weakest since Oct.
2. It is on track for a 2 percent loss on the week.
* U.S. crude CLc1 prices were down 2.2 percent at $44.40 a
barrel, while Brent crude LCOc1 lost 1 percent to $47.62.
* The Canadian dollar was also weaker against most of its
key currency counterparts, most sharply against its
commodity-linked Australian counterpart.
* Canadian government bond prices were lower across the
maturity curve, with the two-year CA2YT=RR price down 3
Canadian cents to yield 0.537 percent and the benchmark 10-year
CA10YT=RR falling 39 Canadian cents to yield 1.494 percent.
* The Canada-U.S. two-year bond spread was -8.8 basis
points, while the 10-year spread was -58.4 basis points.

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