November 27, 2018 / 8:49 PM / 15 days ago

CANADA FX DEBT-C$ hits 5-month low in choppy trading ahead of G20 summit

 (Adds strategist quotes, details on activity, updates prices)
    * Canadian dollar retreats 0.3 percent against the greenback
    * Loonie touches its weakest since June 28 at 1.3328    
    * Price of U.S. oil falls 0.1 percent
    * Canadian bond prices trade higher across the yield curve

    By Fergal Smith
    TORONTO, Nov 27 (Reuters) - The Canadian dollar weakened to
its lowest in nearly five months against a broadly firmer
greenback on Tuesday, as concern about world trade tensions led
to fluctuation in financial markets ahead of the G20 Summit this
week.
    U.S. stocks and the price of oil seesawed after U.S.
President Donald Trump's threat to move ahead with additional
tariffs on Chinese goods dampened hopes of resolving the trade
spat between the two countries.             
    "There really doesn't seem like there is much clarity on
what kind of trade relations we'll have after the G20," said
Mark McCormick, North American head of FX strategy at TD
Securities. "I would say the Canadian dollar gets lumped into
all of those negative forces."
    Canada exports many commodities, including oil, and runs a
current account deficit, so its economy could be hurt if the
global flow of trade or capital slows.    
    U.S. crude oil futures        settled 0.1 percent lower at
$51.56 a barrel.             
    At 3:30 p.m. (2030 GMT), the Canadian dollar          was
trading 0.3 percent lower at 1.3295 to the greenback, or 75.22
U.S. cents. It touched its weakest level since June 28 at
1.3328.    
    The multi-month low for the loonie came after General Motors
Co        announced on Monday it would close its plant in
Oshawa, Ontario, east of Toronto.             
    BMO Capital Markets estimated that the closure would reduce
Canadian gross domestic product by between 0.1 percent and 0.2
percent over a full year.
    Canada's gross domestic product data for the third quarter
is due on Friday.
    The U.S. dollar        reached two-week highs after Federal
Reserve Vice Chair Richard Clarida backed further interest rate
hikes, taking a less dovish stance than some investors had
anticipated.             
    Canadian government bond prices were higher across the yield
curve, with the two-year            up 3.5 Canadian cents to
yield 2.221 percent and the 10-year             rising 23
Canadian cents to yield 2.326 percent.
    The 10-year yield touched its lowest intraday since Sept. 13
at 2.325 percent.

 (Reporting by Fergal Smith; Editing by Bernadette Baum and
Susan Thomas)
  
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