June 5, 2018 / 1:21 PM / 6 months ago

CANADA FX DEBT-C$ slips as Trump mulls bilateral NAFTA talks

    * Canadian dollar at C$1.2980, or 77.04 U.S. cents
    * Price of U.S. oil falls 0.3 percent
    * Bond prices higher across the yield curve

    TORONTO, June 5 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Tuesday as oil prices fell and
U.S. President Donald Trump mulled moving toward bilateral
discussions on NAFTA.
    Trump is considering a shift in the effort to revamp the
North American Free Trade Agreement to separate talks with
Canada and Mexico, White House economic adviser Larry Kudlow
said.             
    Canada sends about 75 percent of its exports to the United
States so its economy could be hurt if a deal on NAFTA is not
reached.
    The price of oil, one of Canada's major exports, fell
following a report that the U.S. government had asked Saudi
Arabia and other major exporters to increase oil output.
            
    U.S. crude        prices were down 0.3 percent at $64.53 a
barrel.
    At 9:13 a.m. EDT (1313 GMT), the Canadian dollar         
was trading 0.4 percent lower at C$1.2980 to the greenback, or
77.04 U.S. cents. The currency traded in a range of C$1.2915 to
C$1.3007.    
    Canadian labor productivity fell by 0.3 percent in the first
quarter, reflecting a deceleration in business output from the
previous quarter, while hours worked accelerated, Statistics
Canada said.
    Canadian government bond prices were higher across the yield
curve in sympathy with U.S. Treasuries and German Bunds. The
two-year            rose 5 Canadian cents to yield 1.909 percent
and the 10-year             climbed 34 Canadian cents to yield
2.238 percent.
    Canada's trade report for April is due on Wednesday and the
May employment report is due on Friday.    

 (Reporting by Fergal Smith; Editing by Bernadette Baum)
  
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