CANADA FX DEBT-C$ softens on China slowdown fears
* C$ at C$0.9916 vs US dollar, or $1.0085 * BHP Billiton sparks China slowdown fears * Bond prices mostly higher By Jon Cook TORONTO, March 20 (Reuters) - The Canadian dollar pulled back from a two-week high against its U.S. counterpart on Tuesday as concerns a slowdown in China could hit global growth boosted the greenback's safe-haven appeal. Commodity-linked currencies such as the Australian and Canadian dollars weakened after BHP Billiton, the world's biggest miner, raised concerns about the possibility of a sharp slowdown in demand from China, a top metals consumer. Earlier this month China cut its 2012 growth target to an eight-year low of 7.5 percent. That led to the Canadian dollar pulling back from its overnight session high of C$0.9869 versus the U.S. dollar, close to its March low at C$0.9842. "That may have sparked a little bit of risk aversion here, and we've just bounced back to where we were 24 hours ago," said Matt Perrier, a director of foreign exchange sales at BMO Capital Markets. At 7:55 a.m. (1155 GMT), the Canadian dollar stood at C$0.9916 versus the U.S. dollar, or $1.0085, down from Monday's North American session close at C$0.9875 versus the greenback, or $1.0127. Perrier said the Canadian currency would likely stay within a narrow window between parity with the U.S. dollar on the top end and at C$0.9850 on the bottom. In absence of any Canadian data, North American investors were focused on U.S. February housing starts data due at 8:30 a.m. (1230 GMT) and remarks later in the day by Treasury Secretary Timothy Geithner, on the international financial system, and by Federal Reserve Chairman Ben Bernanke. Recently, the U.S. dollar has been boosted by a steady stream of encouraging U.S. economic data, reducing the likelihood of further stimulus from the Federal Reserve. "The news has been good on the North American economic front, but until you start to see the market price in some interest rate moves we're not going to get a huge, knee-jerk reaction," said Perrier. Canadian bond prices were mostly higher, with the two-year bond up 4 Canadian cents to yield 1.275 percent. The 10-year bond rose 38 Canadian cents to yield 2.245 percent.
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