CANADA FX DEBT-Canadian dollar weakens as precious metals sell-off spooks traders

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Canadian dollar falls 0.6% against the greenback

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Price of oil decreases 5%

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Manufacturing PMI rises to 50.4 in January

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Bond yields rise across the curve

By Fergal Smith

TORONTO, Feb 2 (Reuters) - The commodity-linked Canadian dollar gave back some recent ?gains against its U.S. counterpart on Monday as oil prices tumbled and precious metals ?added to last week's sharp declines.

The loonie was trading 0.6% lower ?at 1.3695 per U.S. dollar, or 73.02 U.S. ?cents, after moving ?in a range of 1.3607 to 1.3697. On Friday, the currency touched its strongest intraday ?level since October 2024 at ?1.3479.

"A slow-motion flight to safety is underway across the currency markets this morning, as a bloodbath in ?the precious metals complex extends into ?a second ?week," Karl Schamotta, chief market strategist at Corpay, said in a note.

"The U.S. dollar is climbing against all of ?its major rivals as traders exit risky positions across a range of asset classes, and commodity-sensitive currencies like the Australian dollar, Canadian dollar, and Swiss franc are coming under selling pressure."

The price of gold fell 4%, while oil was down 5% on ?signs ?of de-escalating tensions between the United States and OPEC member Iran.

Hard commodities, such as energy and metals, accounted for about 40% ?of Canada's exports in November.

Domestic economic data had little impact. The S&P Global Canada Manufacturing Purchasing Managers' Index (PMI) rose to 50.4 in January from 48.6 in December, marking the first move above the 50 no-change mark in a year.

Canadian bond yields moved higher across the curve, tracking moves ?in U.S. Treasuries. The 10-year was up 1.3 basis points at 3.433%.

The Government of Canada said it plans to issue a new 10-year green bond this ?week subject to market conditions. (Reporting by Fergal Smith and Aurora Ellis)