August 2, 2019 / 2:59 PM / 15 days ago

CANADA FX DEBT-C$ hits a 6-week low on trade tensions, lower exports

    * Canadian dollar falls 0.2% against the greenback
    * Canada's June exports fall 5.1%
    * Price of U.S. oil increases by 3.3%
    * Bond prices move higher across the yield curve

    TORONTO, Aug 2 (Reuters) - The Canadian dollar weakened to a
six-week low against its U.S. counterpart on Friday after
domestic data showed a decrease in exports and as investors
weighed the prospect of additional U.S. tariffs on Chinese
goods.
    Canada posted a narrower trade surplus in June as exports
fell by 5.1%. It was the first drop for exports since February
and reversed a big increase in May.             
    Canada exports many commodities, including oil, so its
economy could be hurt by an escalation of trade tensions. On
Thursday, U.S. President Donald Trump said he would slap 10%
tariffs on $300 billion of Chinese imports starting Sept. 1.
            
    At 10:21 a.m. (1421 GMT), the Canadian dollar          was
trading 0.2% lower at 1.3245 to the greenback, or 75.50 U.S.
cents. The currency hit its lowest intraday since June 20 at
1.3265.
    Meanwhile, the price of oil, one of Canada's major exports,
rose on Friday, regaining some ground after its biggest fall in
years on the escalation of trade tensions. U.S. crude oil
futures        were up 3.3% at $55.73 a barrel.             
    Canadian government bond prices were higher across the yield
curve in sympathy with U.S. treasuries. The two-year           
rose 4 Canadian cents to yield 1.456% and the 10-year
            was up 9 Canadian cents to yield 1.387%.
    The 10-year yield hits its lowest intraday level since
November 2016 at 1.355%.    

 (Reporting by Levent Uslu; Editing by Bernadette Baum)
  
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