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CANADA FX DEBT-C$ weakens slightly as Brexit shockwaves weigh

Published 2016-06-27, 09:37 a/m
© Reuters.  CANADA FX DEBT-C$ weakens slightly as Brexit shockwaves weigh
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$1.3018, or 76.82 U.S. cents
* Bond prices higher across the maturity curve

TORONTO, June 27 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Monday as Britain's vote to
leave the European Union sent new shockwaves through financial
markets, weighing on Canada's risk-sensitive currency.
Global stocks and oil prices fell as market participants
absorbed the shock of Brexit. U.S. crude CLc1
prices were down 2.14 percent at $46.62 a barrel.
Losses for the loonie came after it fell 1.7 percent on
Friday, its largest drop in 17 months.
Canada's commodity-linked economy will suffer weaker growth
because of Britain's vote to leave the EU, which has put the
prospect of Canadian interest rate cuts back on the table.

Overnight index swaps implied a 33-percent chance of a Bank
of Canada rate cut this year after having been priced for no
change in policy before Brexit. BOCWATCH
At 9:22 a.m. EDT (1322 GMT), the Canadian dollar CAD=D4
was trading at C$1.3018 to the greenback, or 76.82 U.S. cents,
slightly weaker than Friday's close of C$1.2999, or 76.93 U.S.
cents.
The currency's strongest level of the session was C$1.2951,
while its weakest was C$1.3090.
Speculators cut bullish bets on the loonie for the third
straight week, Commodity Futures Trading Commission data showed.
Net long Canadian dollar positions tumbled to 2,595 contracts in
the week ended June 21 from 18,440 contracts in prior week.

Canadian government bond prices were higher across the
maturity curve in sympathy with Treasuries as safe-haven assets
rallied.
The two-year CA2YT=RR price rose 5.5 Canadian cents to
yield 0.512 percent and the benchmark 10-year CA10YT=RR
climbed 35 Canadian cents to yield 1.126 percent.
The Canada-U.S. 10-year spread shifted 5 basis points to
-36.6 basis points, its smallest gap since May 3, as Treasuries
outperformed.

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