May 8, 2018 / 8:24 PM / 2 months ago

CANADA FX DEBT-C$ hits 7-week low as oil falls, greenback climbs

 (Adds strategist quotes, details on activity; updates prices)
    * Canadian dollar at C$1.2952, or 77.21 U.S. cents
    * Loonie hit its weakest level since March 21 at C$1.2998
    * Price of oil falls $1.67 to $69.06 a barrel
    * Bond prices lower across the yield curve

    By Fergal Smith
    TORONTO, May 8 (Reuters) - The Canadian dollar weakened to a
nearly seven-week low against its U.S. counterpart on Tuesday,
with the currency breaking out of its recent holding pattern as
oil prices fell and the greenback broadly gained.
    At 4 p.m. EST (2000 GMT), the Canadian dollar          was
trading 0.5 percent lower at C$1.2952 to the greenback, or 77.21
U.S. cents.
    "It's a big dollar move," said Greg Anderson, global head of
foreign exchange strategy at BMO Capital Markets in New York.
"We had resistance right around 1.2900. When we broke that we
nearly got to 1.3000."
    The currency hit its weakest level since March 21 at
C$1.2998, while the U.S. dollar        surged to a 2018 high
against a basket of major currencies.  
    The price of oil, one of Canada's major exports, recouped
some losses after U.S. President Donald Trump confirmed the U.S.
will withdraw from the Iran nuclear deal, in a volatile session
in which prices slumped as much as 4 percent earlier in the day.
            
    U.S. crude oil futures        settled $1.67 lower at $69.06
a barrel.
    Losses for the loonie came as investors weighed prospects
for the North American Free Trade Agreement (NAFTA).
    Canadian, Mexican and U.S. officials hailed progress on
revamping NAFTA as efforts focused on crafting new rules for the
auto sector, but there was no sign of a major breakthrough.
                
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries. The two-year           
dipped 3.5 Canadian cents to yield 1.934 percent and the 10-year
            declined 18 Canadian cents to yield 2.348 percent.
    Canadian housing starts declined in April to a seasonally
adjusted annual rate of 214,379 units as builders responded to
slowing sales in Toronto, Canada's largest city, data from the
Canada Mortgage and Housing Corporation showed on Tuesday.
            
    Canada's jobs report for April is due on Friday.  

 (Reporting by Fergal Smith; 
Editing by Sandra Maler)
  
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