Sorry, I just had to respond that it is a word. (though you probably wrote this weeks ago) KNOWLEDGE!!! http://www.merriam-webster.com/dictionary/signification
Some languages, unlike English, use only one word for both "this" and "that" - French is just one of those languages. If you want "ce/cet/cette" to mean "that", specifically, then you would attach "-là" at the end the noun.
French must be the hardest dang language to understand and to pronounce in the world! This sentence, in both duolingo and in google translates, sounds nothing at all like it ought to (in my opinion). How can the word 'signifie' possibly sound like seez-geez; how can 'cette lettre' sound like cek-klek? For a language that has so much in common with Spanish, it is so much more difficult to learn to speak it. (This is my rant for the day-- sorry -- carry on,)
Actually I think you're hearing it wrong...it's pronounced [SEE NI FEE].
The combination of [gn] in French is a long N sound almost identical to the ñ (as in año) in Spanish....
So Oignon, aside from the O sound, sounds identical to Onion in English, and Espagnol is identical to Español.