(Adds dealer quote and details throughout, updates prices)
    * Canadian dollar weakens 0.6% against the greenback
    * Canadian exports fall 2.3% in September
    * Price of U.S. oil settles 2.5% lower
    * Canadian 10-year yield eases 7.8 basis points to 1.656%

    By Fergal Smith
    TORONTO, Nov 4 (Reuters) - The Canadian dollar on Thursday
weakened against its U.S. counterpart by the most in nearly
seven weeks as oil prices fell and the greenback rallied against
a basket of major currencies.
    The loonie        was trading 0.6% lower at 1.2468 to the
greenback, or 80.21 U.S. cents, its biggest decline since Sept.
17. It touched its weakest intraday level in more than three
weeks at 1.2471.
    "Choppy oil prices played a significant role in Canadian
dollar direction," Rahim Madhavji, president at Knightsbridge
Foreign Exchange, said in a note.
    Oil prices reversed earlier gains in a volatile session
after a report that Saudi Arabia's oil output will soon surpass
10 million barrels per day for the first time since the outset
of the coronavirus pandemic.             
    U.S. crude oil futures        settled 2.5% lower at $78.81 a
barrel, while the U.S. dollar        rebounded from a dip after
the U.S. Federal Reserve repeated it saw high inflation as
    The decline for the loonie came as data showed Canada's
exports fell in September, with a semiconductor chip shortage
weighing on motor vehicle and parts production.                 
    The Canadian employment report for October, due on Friday,
can offer further clues about the strength of the domestic
    Canadian government bond yields were lower across the curve,
tracking the move in U.S. Treasuries. The 10-year            
eased 7.8 basis points to 1.656%, after touching on Monday its
highest level since May 2019 at 1.766%.
    The gap between the Ontario and Canadian 10-year yields
narrowed by 6 basis points to a spread of 52 basis points in
favor of Ontario's bond.
    The province, which is the world's largest sub-sovereign
borrower, projected a smaller budget deficit for the current
fiscal year.             

 (Reporting by Fergal Smith; editing by Jonathan Oatis)

Source link