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CANADA FX DEBT-C$ slips as U.S.-China trade spat dims global growth prospects

Published 2018-09-24, 04:22 p/m
Updated 2018-09-24, 04:30 p/m
© Reuters.  CANADA FX DEBT-C$ slips as U.S.-China trade spat dims global growth prospects

* Canadian dollar dips 0.2 percent against the greenback

* Price of U.S. oil rises 1.8 percent

* Canadian bond prices fall across the yield curve

* 10-year yield touches a 4-month high at 2.459 percent

By Fergal Smith

TORONTO, Sept 24 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Monday, paring some recent gains, as escalation of a trade dispute between the United States and China weighed on the outlook for global growth.

At 3:48 p.m. (1948 GMT), the Canadian dollar CAD=D4 was trading 0.2 percent lower at 1.2944 to the greenback, or 77.26 U.S. cents.

"You can pin some of that (weakness) on the deteriorating situation between China and the U.S.," said Bipan Rai, North America head, FX strategy at CIBC Capital Markets.

The United States and China imposed fresh tariffs on each other's goods as the world's biggest economies showed no signs of backing down from an increasingly bitter trade dispute that is expected to knock global economic growth. trade spat weighed on stock markets around the world, while the price of some industrial metals, such as copper HGc1 , also declined. exports many commodities and runs a current account deficit, so its economy could be hurt if the global flow of trade or capital slows.

The country has its own trade dispute with the United States and is in talks to renew the North American Free Trade Agreement.

U.S. and Canadian officials are "very likely" to hold informal talks on NAFTA on the sidelines of a major U.N. meeting in the next few days, Canadian Prime Minister Justin Trudeau said on Sunday. price of oil, one of Canada's major exports, climbed after Saudi Arabia and Russia ruled out any immediate increase in production despite calls by U.S. President Donald Trump for action to raise global supply. crude oil futures CLc1 settled 1.8 percent higher at $72.08 a barrel.

Canadian wholesale trade rose 1.5 percent in July from June, a bigger increase than the 0.5 percent gain forecast by analysts, data from Statistics Canada showed. volumes rose 1.2 percent, which could help boost gross domestic product for the month. Data for July gross domestic product is due on Friday.

On Thursday, the loonie touched its strongest in more than three months at 1.2885.

Still, speculators have raised bearish bets on the Canadian dollar for the third straight week, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed on Friday. government bond prices were lower across the yield curve, with the 10-year CA10YT=RR falling 15 Canadian cents to yield 2.448 percent. The 10-year yield touched 2.459 percent, the highest since May 22.

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