CANADA FX DEBT-C$ weakens to 6-day low as commodity currencies retreat

Published 2016-07-19, 10:03 a/m
© Reuters.  CANADA FX DEBT-C$ weakens to 6-day low as commodity currencies retreat
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* Canadian dollar at C$1.3025, or 76.78 U.S. cents

* Loonie hits its weakest since July 13 at C$1.3053

* Bond prices slightly higher across the maturity curve

* 10-year yield touches its highest since June 27 at 1.150 percent

TORONTO, July 19 (Reuters) - The Canadian dollar weakened to a nearly one-week low against its U.S. counterpart on Tuesday, tracking losses for fellow commodity currencies as oil prices fell and recent improvement in risk appetite stalled.

World shares dipped for only the second time in nine days, sapped by a drop in oil prices and data that showed Britain's vote to quit the European Union has done serious damage to German economic confidence. crude CLc1 prices were down 0.44 percent to $45.04 a barrel amid concerns over a global supply glut. O/R

The commodity-linked Australian and New Zealand dollars fell as investors ramped up bets that central banks in Australia and New Zealand could ease monetary policy as early as next month. 9:33 a.m. EDT (1333 GMT), the risk-sensitive Canadian dollar CAD=D4 was trading at C$1.3025 to the greenback, or 76.78 U.S. cents, weaker than Monday's close of C$1.2937, or 77.30 U.S. cents.

The currency's strongest level of the session was C$1.2940, while it hit its weakest since July 13 at C$1.3053.

Last week, the loonie rose 0.8 percent as a somewhat optimistic update from the Bank of Canada lowered expectations for an interest rate cut. implied probability of a rate cut this year has fallen below 10 percent, overnight index swaps data showed. It had been above 30 percent in the week following the British referendum vote on June 23 to leave the European Union. BOCWATCH

Canadian government bond prices were slightly higher across the maturity curve, with the two-year CA2YT=RR price up 0.5 Canadian cent to yield 0.577 percent and the benchmark 10-year CA10YT=RR rising 7 Canadian cents to yield 1.092 percent.

Earlier in the session the 10-year yield touched its highest since June 27 at 1.150 percent, extending its rebound from a five-month low on July 11 at 0.935 percent.

Canadian retail sales data for May and inflation data for June are due on Friday.

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