October 1, 2019 / 1:32 PM / 16 days ago

CANADA FX DEBT-Canadian dollar hits 1-week low as domestic economy stalls

    * Canadian dollar weakens 0.3% against greenback
    * Canada's GDP unchanged in July
    * Loonie touches lowest level since Sept. 23 at 1.3290
    * Canadian bond prices decline across steeper yield curve

    TORONTO, Oct 1 (Reuters) - The Canadian dollar weakened to a
one-week low against its U.S. counterpart on Tuesday as the
greenback broadly climbed and after data showed that the
domestic economy unexpectedly failed to grow in July.
    Canada's economy was unchanged in July, following four
straight months of growth, as the country's mining, quarrying
and oil and gas extraction sectors contracted, Statistics Canada
data showed. Analysts had forecast an increase of 0.1%.
            
    Meanwhile, the U.S. dollar        climbed to a 29-month high
as a blizzard of soft global data left the U.S. economy as the
only one still looking reasonably healthy.             
    At 9:01 a.m. (1301 GMT), the Canadian dollar          was
trading 0.3% lower at 1.3282 to the greenback, or 75.29 U.S.
cents. The Canadian currency, which gained 0.5% in September,
hit its weakest intraday level since Sept. 23 at 1.3290.    
    The decline for the loonie came as another commodity-linked
currency, the Australian dollar, was pressured by a Reserve Bank
of Australia interest rate cut.
    The Bank of Canada has left interest rates on hold this year
despite easing by some of its global peers, including the U.S.
Federal Reserve. Still, Canada's central bank has worried that
the U.S.-China trade conflict is weighing more heavily on the
global economy.                    
    The price of oil, one of Canada's major exports, rebounded
on reports that output from the world's largest oil producers
fell during the third quarter, although a resumption in Saudi
supply and demand concerns kept a lid on gains. U.S. crude oil
futures        were up 1.1% at $54.65 a barrel.             
    Canadian government bond prices were lower across a steeper
yield curve. The two-year            fell 5 Canadian cents to
yield 1.608% and the 10-year             was down 68 Canadian
cents to yield 1.434%, its highest yield since Sept. 20.

 (Reporting by Fergal Smith
Editing by Paul Simao)
  
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