CANADA FX DEBT-C$ drops to one-week low as oil and stocks slide

Published 2017-11-15, 09:50 a/m
© Reuters.  CANADA FX DEBT-C$ drops to one-week low as oil and stocks slide
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* Canadian dollar at C$1.2782, or 78.24 U.S. cents

* Loonie touches its weakest since Nov. 7 at C$1.2784

* Oil falls for fourth straight day

* Bond prices higher across a flatter yield curve

By Fergal Smith

TORONTO, Nov 15 (Reuters) - The Canadian dollar weakened to a one-week low against its U.S. counterpart on Wednesday as oil and stocks fell, while investors weighed trade uncertainties ahead of the resumption of NAFTA renegotiations.

At 9:12 a.m. ET (1412 GMT), the Canadian dollar CAD=D4 was trading at C$1.2782 to the greenback, or 78.24 U.S. cents, down 0.4 percent.

The currency's strongest level of the session was C$1.2714, while it touched its weakest since Nov. 7 at C$1.2784.

Prices of oil, one of Canada's major exports, slipped for a fourth day on a gloomy outlook for oil demand growth from the International Energy Agency. crude CLc1 prices fell 0.99 percent to $55.15 a barrel.

World stocks were set for their longest losing streak in more than six months, while the U.S. dollar .DXY lost ground against a basket of major currencies amid doubts about prospects for a U.S. tax plan. Senate Republicans on Tuesday linked repealing a key component of Obamacare to their ambitious tax-cut plan, raising new political risks and uncertainties for the tax measure that financial markets have been monitoring closely for months. Tuesday, the Canadian government launched a North American Free Trade Agreement challenge of the U.S. Commerce Department's decision earlier this month to impose duties on softwood lumber exports from its northern neighbor. working groups are due to begin meeting from Wednesday in Mexico. On Friday, talks will get underway and continue through Nov. 21.

"Uncertainty about trade protectionism is one factor likely to sideline the Bank (of Canada) until March," Sal Guatieri, senior economist at BMO Capital Markets, said in a research note.

Bank of Canada Senior Deputy Governor Carolyn Wilkins will give a speech on Wednesday evening in New York on monetary policy amid uncertainty.

Canadian government bond prices were higher across a flatter yield curve in sympathy with U.S. Treasuries. The two-year CA2YT=RR rose 3 Canadian cents to yield 1.445 percent and the 10-year CA10YT=RR climbed 24 Canadian cents to yield 1.922 percent.

In domestic data, resales of Canadian homes rose 0.9 percent in October from September, the third straight monthly rise.

Canada's manufacturing sales data for September is due on Thursday and the October inflation report will be released on Friday.

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