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CANADA FX DEBT-C$ weakens with crude oil, hits new 11-year low

Published 2015-12-07, 09:45 a/m
Updated 2015-12-07, 09:50 a/m
CANADA FX DEBT-C$ weakens with crude oil, hits new 11-year low

* Canadian dollar at C$1.3486 or 74.15 U.S. cents
* Bond prices mixed across the maturity curve

TORONTO, Dec 7 (Reuters) - The Canadian dollar hit its
weakest level in more than 11 years on Monday, pressured by
further slippage in crude oil and the likely start of U.S.
Federal Reserve tightening next week.
Oil prices edged closer to 2015 lows after the Organization
of the Petroleum Exporting Countries (OPEC) ended its policy
meeting on Friday without agreeing to lower production.

U.S. crude CLc1 prices were down 3.35 percent to $38.63 a
barrel, while Brent crude LCOc1 lost 2.65 percent to
$41.86.
On Friday, Canadian data suggested the economy was off to a
weak start in the final quarter of 2015 after just recently
emerging from a mild recession.
Speculators added slightly to bearish bets on the Canadian
dollar, according to Reuters calculations and data from the
Commodity Futures Trading Commission released on Friday.

Net short exposure rose to -38,980 contracts, as of Dec 1,
2015, from -38,617 contracts in the prior week.
At 9:21 a.m. EST (1421 GMT), the Canadian dollar
was trading at C$1.3486 to the greenback, or 74.15 U.S. cents,
much weaker than the Bank of Canada's official close on Friday
of C$1.3377, or 74.76 U.S. cents.
The currency's strongest level of the session was C$1.3363,
while its weakest level was C$1.3492.
That was its weakest level since mid-2004.
Against the euro, losses for the Canadian dollar were more
restrained, with the currency weakening to C$1.4570. European
Central Bank President Mario Draghi said on Friday the ECB could
deploy more stimulus if needed.
Canadian government bond prices were mixed across the
maturity curve, with the two-year CA2YT=RR up 1 Canadian cent
to yield 0.625, the five-year CA5YT=RR price down 4 Canadian
cents to yield 0.926 percent, and the benchmark 10-year
CA10YT=RR rising 4 Canadian cents to yield 1.575 percent.
The Canada-U.S. 5-year spread was 1.1 basis points narrower
at -78.4 basis points, trimming recent outperformance for
Canada's 5-year bond.
Bank of Canada Governor Stephen Poloz will speak Tuesday on
"The Evolution of Unconventional Monetary Policy," six days
after the Bank of Canada held interest rates steady in its last
rate decision of the year.

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