CANADA FX DEBT-Canadian dollar hits six-day low as pandemic clips risk appetite
* Canadian dollar weakens 0.5% against the greenback
* U.S. oil price falls 2.7%
* Canadian bond yields ease across a flatter curve
TORONTO, Oct 26 (Reuters) - The Canadian dollar fell to a six-day low against the greenback on Monday as rising COVID-19 infections and uncertain prospects for U.S. fiscal aid weighed on sentiment, with investors also eyeing a Bank of Canada interest rate decision this week.
Global shares started the week on the back foot as surging coronavirus cases in Europe and the United States clouded the global economic outlook, while there was no clear prospect of a U.S. pandemic relief package.
Canada is a major producer of commodities, including oil, so the loonie tends to be sensitive to global economic prospects.
U.S. crude prices were down 2.7% at $38.79 a barrel, extending last week's decline, while the safe-haven U.S. dollar rose against a basket of major currencies.
The Canadian dollar was trading 0.5% lower at 1.3185 to the greenback, or 75.84 U.S. cents, giving back almost all of last week's advance. The currency touched its weakest intraday level since last Tuesday at 1.3196.
Speculators have raised their bearish bets on the Canadian dollar to their highest in seven weeks, data from the U.S. Commodity Futures Trading Commission showed on Friday. As of Oct. 20, net short positions had increased to 19,075 contracts from 13,564 the previous week.
The Bank of Canada is due to make an interest rate decision and update its economic outlook on Wednesday. The central bank has said it will leave rates at a record low of 0.25% until its 2% inflation target is achieved sustainably, which it does not expect for at least two years.
Canadian government bond yields were lower across a flatter curve in sympathy with U.S. Treasuries. The 10-year yield fell 1.8 basis points to 0.625%, extending its pullback from Friday's eight-week high of 0.680%. (Reporting by Fergal Smith Editing by David Goodman ) ((email@example.com; +1 647 480 7446;)) Keywords: CANADA FOREX/
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