CANADA FX DEBT-Canadian dollar hits a near seven-month low ahead of federal budget
By Fergal Smith
TORONTO, Nov 4 (Reuters) - The Canadian dollar weakened to a near seven-month low against its U.S. counterpart on Tuesday as the greenback benefited from safe-haven demand and investors awaited a Canadian federal budget that could forecast wider fiscal deficits.
The loonie CAD= was trading 0.2% lower at 1.4090 per U.S. dollar, or 74.21 U.S. cents, after touching its weakest intraday level since April 10 at 1.4095.
Recent signs of a slowdown in the domestic economy and broad-based gains for the U.S. currency have weighed on the Canadian currency, said Kevin Ford, FX and macro strategist at Convera.
Data on Friday showed a surprise decline for Canadian GDP in August.
The U.S. dollar .DXY added to recent gains against a basket of major currencies as divisions in the Federal Reserve raised doubt about the prospect of another rate cut this year, while a risk-off move led investors to seek the U.S. currency for safety.
Wall Street's main indexes slipped to more than one-week lows following warnings of a market selloff from some big U.S. banks.
"Adding to the pressure, Canada's fiscal outlook is poised to deteriorate," Ford said.
Prime Minister Mark Carney will unleash a major fiscal stimulus in his budget proposal as he aims to unlock billions of dollars in investment and transform the economy to rely less on the United States, Canada's top trading partner.
The price of oil, one of Canada's major exports, was trading 0.7% lower at $60.61 a barrel.
Canadian bond yields were mixed across the curve, with the 10-year CA10YT=RR barely changed at 3.146%.
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