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CANADA FX DEBT-C$ weaker as oil falls, investors weigh NAFTA talks

(Adds strategist comment, updates pricing)

* Canadian dollar at C$1.2808, or 78.08 U.S. cents

* Oil falls 0.8 percent

* Bond prices lower across the yield curve

TORONTO, Nov 20 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Monday as oil prices fell and investors focused on negotiations to update the North American Free Trade Agreement (NAFTA). Oil, one of Canada's major exports, eased as traders were wary of betting too heavily on which way prices might move ahead of next week's meeting of the Organization of the Petroleum Exporting Countries. "The market may be shifting its collective attention more toward developments in crude prices," said Mazen Issa, senior foreign exchange strategist at TD Securities. Oil prices fell 0.8 percent.

At 4 p.m. EST (2100 GMT), the Canadian dollar was

down 0.3 percent at C$1.2808 to the greenback, or 78.08 U.S. cents. The currency traded in a narrow range of C$1.2756 to C$1.2816. "The other factor that will be pretty important will be retail sales later this week," Issa said. The Bank of Canada has said it will closely watch economic indicators when deciding next steps in monetary policy after raising interest rates twice so far this year. On Friday, the loonie touched a two-week low at C$1.2824 after tame inflation data tempered prospects the central bank would raise rates in the first quarter of 2018. People familiar with talks to update the 23-year-old NAFTA trade deal said Canada and Mexico planned on Monday to question U.S. demands around automotive content, underlining scant progress in the fifth of seven planned rounds of talks.

"I don't think the currency is adequately reflecting that (NAFTA) risk," TD's Issa said. Speculators have cut bullish bets on the Canadian dollar, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed on Friday. As of Tuesday, net long positions had slipped to 47,335 contracts from 50,889 a week earlier. In October, bullish bets had reached 76,392 contracts, their highest in five years. Canadian government bond prices were lower across the yield

curve, with the two-year down 3.5 Canadian cents to yield 1.475 percent and the 10-year falling 15

Canadian cents to yield 1.956 percent. Canadian wholesale trade for September is due on Tuesday, and retail sales data for that month is set for release on Thursday.

(Additional reporting by Fergal Smith Editing by Sandra Maler)