December 17, 2018 / 3:17 PM / 5 months ago

CANADA FX DEBT-C$ lags most other G10 currencies as stocks retreat

    * Canadian dollar falls 0.1 percent against the greenback
    * Loonie is one of two G10 currencies to decline
    * Bond prices rise across a flatter yield curve

    TORONTO, Dec 17 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Monday, underperforming most
other G10 currencies as lingering worries about global growth
weighed on stocks ahead of a potential interest rate hike this
week from the Federal Reserve.
    Wall Street lost ground as edgy investors waited for the
Fed's monetary policy guidance on Wednesday and its implications
of slowing global growth.                         
    Canada exports many commodities, including oil, so its
economy could be hurt by slower global growth. U.S. crude       
prices were down 0.2 percent at $51.12 a barrel.             
    At 9:45 a.m. (1445 GMT), the Canadian dollar          was
trading 0.1 percent lower at 1.3397 to the greenback, or 74.64
U.S. cents. The loonie, which traded in a range of 1.3373 to
1.3402, was the only G10 currency other than the Norwegian krone
to decline.
    Last week, the loonie fell 0.4 percent. It was the fourth
straight week that the currency was down.    
    Domestic data showed that home sales slowed further last
month. Resales of Canadian homes fell 2.3 percent in November
from October, the Canadian Real Estate Association said.
            
    Investors are also awaiting Canadian inflation data on
Wednesday, which could help guide expectations for additional
interest rate hikes from the Bank of Canada. Chances of a hike
as soon as January have tumbled to less than 10 percent from
about 60 percent before a dovish interest rate announcement from
the central bank earlier this month.                       
    Still, speculators have cut their bearish bets on the
Canadian dollar for the first time in five weeks, data from the
U.S. Commodity Futures Trading Commission and Reuters
calculations showed on Friday. As of Dec. 11, net short
positions had dipped to 11,669 contracts from 12,936 a week
earlier.
    Canadian government bond prices were higher across a flatter
yield curve, with the two-year            up 1.5 Canadian cents
to yield 2.013 percent and the 10-year             rising 9
Canadian cents to yield 2.09 percent.    

 (Reporting by Fergal Smith
Editing by Alistair Bell)
  
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