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CANADA FX DEBT-Canadian dollar dips as investors wait for cheaper buying level

 (Adds dealer quotes and details throughout; updates prices)
    * Canadian dollar dips 0.1% against the greenback
    * Producer prices in Canada rise by 0.3% in August 
    * Price of U.S. oil settles 3.2% lower
    * Canada's 10-year yield eases 1.1 basis points to 0.538%

    By Fergal Smith
    TORONTO, Sept 29 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Tuesday as oil prices fell and
investors waited for the currency to extend this month's decline
before stepping in to buy it, with the loonie sticking to its
recent trading range.
    The loonie        was trading 0.1% lower at 1.3381 to the
greenback, or 74.73 U.S. cents, having matched intraday Friday's
7-week low at 1.3418. The currency has fallen 2.5% this month as
rising coronavirus cases in some parts of the world spooked
financial markets.
    "Client feedback suggests that there should be some decent
U.S. dollar selling activity if we go north of 1.35, which
should cap it," said Simon Côté, managing director, risk
management solutions, National Bank Financial. "There will have
to be some decent risk-off sentiment for the dollar to go higher
than that."
    Canada runs a current account deficit and is a major
producer of commodities, including oil, so the loonie tends to
be sensitive to the global flow of trade and capital.
    U.S. crude oil futures        settled 3.2% lower at $39.29 a
barrel on worries about the outlook for fuel demand as Europe
and the United States grappled with a surge in new coronavirus
infections.             
    Producer prices in Canada rose by 0.3% in August from July
on higher prices for primary non-ferrous metal products,
Statistics Canada said. Still, prices were down 2.3% compared to
the same month last year.             
    Canada's GDP data for July is due on Wednesday, which could
help guide expectations about the strength of economic recovery.
    Canadian government bond yields eased across a flatter
curve, with the 10-year dipping 1.1 basis points to 0.538%.

 (Reporting by Fergal Smith
Editing by Nick Zieminski and Alistair Bell)
  
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