CANADA FX DEBT-C$ falls as global inflation outlook in focus

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    * Loonie trades in a range of 1.2627 to 1.2594
    * Price of U.S. oil rises slightly after hitting six-week
low

    By John McCrank
    Nov 18 (Businesshala) - The Canadian dollar extended its losses
versus its U.S. counterpart on Thursday, touching a six-week
low, after oil prices slid and inflation figures came in as
expected a day earlier, in contrast to upside surprises in other
countries.
    At 9:25AM EST (1425 GMT), the loonie        was trading 0.6%
lower at 1.2615 to the greenback, or 79.27 U.S. cents, having
earlier touched its weakest level since Oct. 6 at 1.2627.
    "The previous tailwinds for the loonie rally have recently
switched," said Simon Harvey, FX market analyst for Monex Europe
and Monex Canada.
    The Canadian dollar slumped on Tuesday after domestic data
showed inflation rising at 4.7% in October, which was spot on
market expectations.             
    "In normal times, when you've got 4%-plus inflation it would
be quite positive for a currency," said Harvey. "But it came in
at a time when G10 inflation is surprising to the upside
consistently, whether it's the U.S., the UK or just globally, so
the idea that Canadian inflation came in as expected was
actually a bit of a weight on Canadian front-end bond yields."
    The price of oil, one of Canada's major exports, was also a
drag, having slid to six-week lows after China said it was
moving to tap reserves, before reversing its losses.
            
    China's move followed a Businesshala report that the United
States was asking large consuming nations to consider a
stockpile release to lower prices as inflationary pressures,
driven in part by surging energy prices, start to produce a
political backlash.             
    Brent crude         was up 23 cents, or 0.3%, higher at
$80.51 a barrel, after earlier dropping to its lowest since Oct.
7 at $79.28.
    

 (Reporting by John McCrank; Editing by Edmund Blair)
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