October 25, 2018 / 2:40 PM / in a month

CANADA FX DEBT-C$ retreats as boost fades from BoC rate hike

    * Canadian dollar falls 0.2 percent against the greenback
    * Price of U.S. oil rises 0.8 percent
    * Canadian bond prices decline across a flatter yield curve
    * Gap between 2- and 10-year yields hits narrowest in 11
years

    TORONTO, Oct 25 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Thursday as the boost it got
from a Bank of Canada interest rate hike on the previous day was
unwound.
    At 10:15 a.m. (1415 GMT), the Canadian dollar          was
trading 0.2 percent lower at 1.3087 to the greenback, or 76.41
U.S. cents. The currency traded in a range of 1.3015 to 1.3096. 
    On Wednesday, the loonie touched its strongest intraday
level in one-week at 1.2969 after the Bank of Canada raised
interest rates 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.             
    Money markets expect the central bank to hike again by
January.           
    The price of oil, one of Canada's major exports, bounced
back from an early sell-off after Asian and European stock
markets plunged in the wake of Wall Street's biggest daily
decline since 2011.             
    U.S. crude        prices rose 0.8 percent to $67.35 a
barrel, while U.S. stocks were boosted by strong quarterly
results reports from Comcast Corp, Microsoft Corp and electric
carmaker Tesla Inc.             
    Canadian average weekly earnings of nonfarm payroll
employees rose 2.9 percent year-over-year in August, while the
number of nonfarm payroll employees was up 24,600 in August from
July, according to data released on Thursday here.
  
    Canadian government bond prices were lower across a flatter
yield curve, with the two-year            down 2 Canadian cents
to yield 2.317 percent and the 10-year             declining 5
Canadian cents to yield 2.448 percent.
    The gap between the two-year and 10-year yields narrowed by
0.5 basis points to a spread of 13.1 basis points, its smallest
since October 2007.

 (Reporting by Fergal Smith; editing by Jonathan Oatis)
  
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