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CANADA FX DEBT-C$ hits one-week low as stocks, oil prices fall

Published 2018-05-23, 09:44 a/m
Updated 2018-05-23, 09:50 a/m
© Reuters.  CANADA FX DEBT-C$ hits one-week low as stocks, oil prices fall

© Reuters. CANADA FX DEBT-C$ hits one-week low as stocks, oil prices fall

* Canadian dollar at C$1.2873, or 77.68 U.S. cents

* Loonie touches its weakest since May 15 at C$1.2916

* Bond prices higher across a flatter yield curve

By Fergal Smith

TORONTO, May 23 (Reuters) - The Canadian dollar weakened to a more than one-week low against its U.S. counterpart on Wednesday as the greenback broadly climbed, while stocks and oil prices fell.

At 9:27 a.m. EDT (1327 GMT), the Canadian dollar CAD=D4 was trading 0.4 percent lower at C$1.2873 to the greenback, or 77.68 U.S. cents. The currency touched its weakest level since May 15 at C$1.2916.

Losses for the loonie came as fresh uncertainty over U.S.-China trade talks weighed on global stocks. commodity-linked currency tends to track movement in equities due to the signal that stock markets send about prospects for growth.

The price of oil, one of Canada's major exports, was pressured by a potential increase in OPEC crude output to cool the market's recent rally and cover any shortfalls in supply from Iran and Venezuela. crude CLc1 prices were down 0.5 percent at $71.86 a barrel.

The U.S. dollar .DXY rose against a basket of major currencies as fresh data indicating a slowdown in European business activity and concerns over Italian politics weighed on the euro. U.S., Canadian and Mexican officials are in constant contact about slow-moving talks to revitalize the North American Free Trade Agreement (NAFTA) and are ready to meet at any time to push the process forwards, Canada's foreign minister, Chrystia Freeland, said on Tuesday. sends 75 percent of its exports to the United States so its economy could be hurt if a NAFTA deal is not reached.

Still, lending to small Canadian businesses picked up in March as gains were seen in the manufacturing and construction industries, boding well for stronger economic growth in the coming months, data on Wednesday showed. government bond prices were higher across a flatter yield curve as waning risk appetite boosted U.S. Treasuries ahead of a Federal Reserve report that would be watched for clues on the pace of future interest rate hikes.

Canada's two-year CA2YT=RR rose 6.5 Canadian cents to yield 2.023 percent and the 10-year CA10YT=RR climbed 57 Canadian cents to yield 2.45 percent.

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