November 28, 2018 / 3:35 PM / 18 days ago

CANADA FX DEBT-C$ hits 5-month low as Canada, Mexico, U.S. prepare to sign trade pact

    * Canadian dollar falls 0.3 percent against the greenback
    * Loonie touches its weakest since June 28 at 1.3344
    * Price of U.S. oil falls 1.3 percent
    * Canada's 10-year yield hits lowest in more than two months

    TORONTO, Nov 28 (Reuters) - The Canadian dollar weakened to
a five-month low against its U.S. counterpart on Wednesday as
oil prices declined and ahead of the potential signing of a new
North American trade pact this week.
    The agreement, reached at the end of September, reduced a
source of uncertainty for Canadian businesses. But the potential
benefit for Canada's economy has been offset by a sharp decline
in the price of oil, one of the country's major exports.
    Dairy remains a sticking point between the United States and
Canada as the countries prepare to sign the U.S.-Mexico-Canada
Agreement (USMCA), according to four sources familiar with the
matter.             
    The price of oil was pressured on Wednesday by rising U.S.
inventories and doubts over whether an OPEC-led output cut will
be agreed next week. U.S. crude        prices were down 1.30
percent at $50.89 a barrel.             
    At 9:59 a.m. (1459 GMT), the Canadian dollar          was
trading 0.3 percent lower at 1.3337 to the greenback, or 74.98
U.S. cents. The currency touched its weakest level since June 28
at 1.3344.
    The loonie lost ground even as stocks were boosted by hopes
of a trade truce between the United States and China at the G20
Summit.             
    The U.S. dollar        edged higher against a basket of
major currencies before a speech by Federal Reserve Chairman
Jerome Powell that could provide clues on the path of interest
rate hikes. 
    Canadian government bond prices were slightly higher across
much of the yield curve, with the 10-year             rising 6
Canadian cents to yield 2.331 percent.
    The 10-year yield hit its lowest intraday since Sept. 13 at
2.313 percent.  

 (Reporting by Fergal Smith
Editing by Susan Thomas)
  
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