CANADA FX DEBT-Canadian dollar weakens as Fed rate cut doubts hit investor sentiment

By Fergal Smith

TORONTO, Nov 13 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Thursday as rising doubts about the Federal Reserve cutting interest rates further next month contributed to increased risk aversion.

The loonie CAD= was trading 0.2% lower at 1.4030 per U.S. dollar, or 71.28 U.S. cents, after moving in a range of 1.3986 to 1.4037.

"It's a risk-off day and the loonie is caught in it," said Adam Button, chief currency analyst at investingLive.

Wall Street tumbled, with steep losses for some AI heavyweights, and the U.S. dollar .DXY declined against a basket of major currencies as investors scaled back expectations of interest rate cuts due to inflation worries and divisions among central bankers about the U.S. economy's health.

"The (U.S.) dollar is increasingly influenced by the Nasdaq and the flows into the mega-cap names and they're getting hit pretty hard today," Button said.

The loonie, the Australian dollar and the New Zealand dollar were the only Group of 10 currencies to lose ground against the greenback. All three are commodity-linked currencies, so they tend to be sensitive to the signal that stocks send about the economic outlook.

The price of oil, one of Canada's major exports, settled 0.3% higher at $58.69 a barrel, clawing back a small part of the previous day's sharp decline.

Canada said it will add the proposed Ksi Lisims LNG facility to its major projects list for fast-tracking, a designation the company behind the project said makes it more likely to proceed.

Canadian bond yields rose across the curve, tracking moves in U.S. Treasuries. The 10-year CA10YT=RR was up 2.6 basis points at 3.180%.