October 29, 2018 / 2:20 PM / in 18 days

CANADA FX DEBT-C$ dips against stronger greenback as oil prices fall

    * Canadian dollar dips 0.1 percent against the greenback
    * Price of U.S. oil falls 0.8 percent
    * Bond prices trade lower across the yield curve
    * Canada-U.S. 10-year spread widens by 2.1 basis points

    TORONTO, Oct 29 (Reuters) - The Canadian dollar edged lower
against its broadly stronger U.S. counterpart on Monday, trading
in a narrow range as stocks rose and oil prices declined.
    Wall Street bounced back from a steep sell-off last week,
helped by gains in auto stocks.             
    Canada runs a current account deficit and exports many
commodities, including oil, so its economy tends to benefit when
capital flows freely.
    Still, concern over the global economy put crude on track
for its biggest monthly fall since mid-2016. U.S. crude oil
futures        were down 0.8 percent at $67.02 a
barrel.            
    The U.S. dollar        climbed against a basket of
currencies after a report that German Chancellor Angela Merkel
will not seek re-election as party chairwoman weighed on the
euro.             
    At 10:02 a.m. (1402 GMT), the Canadian dollar          was
trading 0.1 percent lower at 1.3111 to the greenback, or 76.27
U.S. cents. The currency, which on Friday hit a six-week low
intraday at 1.3160, traded in a range of 1.3083 to 1.3118.
    The loonie dipped 0.1 percent last week even as the Bank of
Canada raised interest rates for the fifth time since July 2017
and said it might speed up the pace of future hikes given that
the economy was running at almost full capacity and did not need
any stimulus.             
    Speculators have cut bearish bets on the Canadian dollar to
the lowest since March, data from the U.S. Commodity Futures
Trading Commission and Reuters calculations showed on Friday. As
of Oct. 23, net short positions had decreased to 7,228 contracts
from 11,019 a week earlier.             
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries. The two-year           
fell 1.5 Canadian cents to yield 2.274 percent and the benchmark
10-year             declined 4 Canadian cents to yield 2.399
percent.
    The gap between Canada's 10-year yield and its U.S.
equivalent widened by 2.1 basis points to a spread of 70.3 basis
points in favor of the U.S. bond.

 (Reporting by Fergal Smith
Editing by Frances Kerry)
  
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