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CANADA FX DEBT-Canadian dollar tumbles by most since June on rising risk aversion

 (Adds investor quotes and details throughout; updates prices)
    * Canadian dollar falls 0.9% against the greenback
    * Loonie touches its weakest since Aug. 25 at 1.3220
    * Price of U.S. oil settles 7.6% lower
    * Canadian bond yields ease across a flatter curve

    By Fergal Smith
    TORONTO, Sept 8 (Reuters) - The Canadian dollar fell to a
two-week low against its U.S. counterpart on Tuesday as oil
prices tumbled and a selloff in technology shares weighed on
investor sentiment, with the loonie sliding one day before a
Bank of Canada interest rate decision.
    The loonie        was trading 0.9% lower at 1.3215 to the
greenback, or 75.67 U.S. cents, its biggest decline since June
11. The currency hit its weakest intraday level since Aug. 25 at
1.3220, having pulled back from its strongest in nearly eight
months last week at 1.2990.
    "That heavy risk-off tone is finally making its way through
to the loonie," said Scott Smith, managing partner at Viewpoint
Investment Partners, adding that "we are seeing the loonie
selloff in line with the rest of global financial markets."
    U.S. crude oil futures        settled 7.6% lower $36.76 a
barrel, after Saudi Arabia cut its October selling prices and
there was a flare-up of novel coronavirus cases around the
world.              
    The Nasdaq tumbled as a sell-off in high-flying technology
stocks extended to a third straight day, while the safe-haven
U.S. dollar climbed to a three-week high against a basket of
major currencies.             
    The Bank of Canada is expected to leave its benchmark
interest rate on hold at 0.25% on Wednesday and at least until
the end of 2022, a Reuters poll showed, despite data suggesting
to some analysts that the economy is recovering faster than the
central bank expected.             
    "It will mostly be cruise control for the time being from
the Bank of Canada," Smith said.    
    Canadian government bond yields were lower across a flatter
curve in sympathy with U.S. Treasuries on Tuesday. The 10-year
            fell 3.3 basis points to 0.564%. 

 (Reporting by Fergal Smith; Editing by Andrea Ricci and Grant
McCool)
  
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