July 13, 2018 / 2:31 PM / in 5 months

CANADA FX DEBT-C$ dips vs stronger greenback amid EU trade deal risk

    * Canadian dollar at C$1.3183, or 75.86 U.S. cents
    * Price of U.S. oil rises 0.3 percent
    * Bond prices higher across much of the yield curve

    TORONTO, July 13 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Friday as the greenback broadly
climbed, with a trade deal between Canada and the EU being
potentially at risk.
    At 10:08 a.m. EDT (1408 GMT), the Canadian dollar         
was trading 0.2 percent lower at C$1.3183 to the greenback, or
75.86 U.S. cents. The currency, which is on track to fall 0.7
percent for the week, traded in a range of C$1.3153 to C$1.3209.
    Italy will not ratify the European Union's free trade
agreement with Canada, Deputy Prime Minister Luigi Di Maio said.
The Comprehensive Economic and Trade Agreement needs to be
approved by all 28 EU member states to take full effect.
                 
    The U.S. dollar        benefited from a safe-haven bid after
data showing a record Chinese trade surplus stirred worries
about the U.S.-China trade row.             
    Canada exports many commodities, including oil, and runs a
current account deficit so its economy could also be hurt if the
flow of trade or capital slows.
    The country has its own trade dispute with the United States
and is also in slow-moving talks to revamp the North American
Free Trade Agreement.
    Still, Canadian exporters are more optimistic about the
near-term outlook, Export Development Canada's Mid-Year Trade
Confidence Index showed.
    Stronger exports and investment have started to reduce
Canada's reliance on household spending to fuel growth, the Bank
of Canada said on Wednesday as it raised rates for a fourth time
since July 2017.    
    Chances of another rate hike by December have fallen to
about 50 percent from more than 70 percent after Wednesday's
rate announcement, the overnight index swaps market indicated.
          
    The price of oil rose but was set for a second straight week
of declines after Libyan ports reopened and on the view that
Iran might still export some crude despite U.S. sanctions.
            
    U.S. crude        prices were up 0.3 percent at $70.53 a
barrel. 
    Canadian government bond prices were slightly higher across
much of the yield curve in sympathy with U.S. Treasuries.
    The two-year            was up 1 Canadian cent to yield
1.929 percent and the 10-year             gained 8 Canadian
cents to yield 2.141 percent. 

 (Reporting by Fergal Smith; Editing by Bernadette Baum)
  
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