September 18, 2012 / 12:27 PM / 5 years ago

Canadian dollar holds ground in broad US$ rally

TORONTO (Reuters) - The Canadian dollar steadied against the U.S. dollar on Tuesday after a sell-off in the last couple sessions knocked the currency off its 13-month highs, but it outperformed other majors as it benefited from a broad rebound in the greenback.

For the most part, riskier assets succumbed to renewed risk aversion as investors turned their attention from central bank stimulus to slowing global growth and doubts about Spain's desire for an international aid package. <MKTS/GLOB>

Even the safe-haven yen ceded ground against the U.S. dollar on speculation the Bank of Japan might loosen policy after the U.S. Federal Reserve launched a fresh round of bond-buying last week.

"When you get these pure (U.S. dollar) moves, CAD tends to get pulled along," said Adam Cole, global head of currency strategy at RBC Capital Markets in London.

At 8:07 a.m. EDT (1207 GMT), the Canadian dollar stood at C$0.9752 versus its U.S. counterpart, or $1.0254, flat from Monday's North American session finish at C$0.9753, or $1.0253.

Cole noted Canadian-dollar resistance around C$0.9630 and support near C$0.9840.

Canadian government bond prices edged higher across the curve, tracking U.S. Treasuries up as a recent sharp sell-off lured investors back into the cheapened market. <US/>

The two-year bond was up 2 Canadian cents to yield 1.000 percent, while the benchmark 10-year bond added 26 Canadian cents, yielding 1.918 percent.

Reporting by Claire Sibonney

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