January 9, 2020 / 3:13 PM / 18 days ago

CANADA FX DEBT-Canadian dollar hits 10-day low ahead of remarks by BoC's Poloz

    * Canadian dollar falls 0.2% against the greenback
    * Loonie touches its weakest since Dec. 30 at 1.3073
    * Price of U.S. oil declines 0.6%
    * Canada-U.S. 10-year spread widens by 2.2 basis points

    TORONTO, Jan 9 (Reuters) - The Canadian dollar weakened to a
10-day low against the greenback on Thursday as oil prices fell
and domestic data showed a surprise drop in housing starts,
while investors awaited remarks by Bank of Canada Governor
Stephen Poloz.
    At 9:43 a.m. (1443 GMT), the Canadian dollar        was
trading 0.2% lower at 1.3067 to the greenback, or 76.53 U.S.
cents. The currency touched its weakest intraday level since
Dec. 30 at 1.3073.
    The seasonally adjusted annualized rate of Canadian housing
starts fell 3% to 197,329 units in December from a revised
204,320 units in November, the Canadian Mortgage and Housing
Corporation (CMHC) said. Economists had expected starts to rise
to 210,000.             
    Separate data, from Statistics Canada, showed that the value
of Canadian building permits fell by 2.4% in November from
October.
    Oil prices added to the previous session's sharp losses on
the back of swelling U.S. crude stocks and easing fears of
imminent escalation of conflict between the United States and
Iran. U.S. crude        prices were down 0.60% at $59.25 a
barrel.             
    The decline for the loonie came ahead of remarks later on
Thursday by Bank of Canada Governor Stephen Poloz. The central
bank will release Poloz's prepared remarks at 1:45 p.m. (1645
GMT).
    In December, the Bank of Canada pointed to early signs the
global economy was stabilizing and sources of resilience in the
Canadian economy as it left its benchmark interest rate on hold
at 1.75%. But domestic data has since showed that Canada's
economy shrank 0.1% in October and shed more than 70,000 jobs in
November.
    As the Canadian economy softens and the recent boost from
easing trade tensions fades, the Canadian dollar, which was the
top-performing G10 currency in 2019, is expected to shift into a
sideways trading pattern over the coming year, a Reuters poll
showed.             
    Canadian government bond prices were little changed across
the yield curve on Thursday, with the 10-year             rising
4 Canadian cents to yield 1.628%.
    The gap between the 10-year yield and its U.S. equivalent
widened by 2.2 basis points to a spread of 26.3 basis points in
favor of the U.S. bond.

 (Reporting by Fergal Smith; editing by Jonathan Oatis)
  
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