CANADA FX DEBT-C$ steady ahead of Irish vote, U.S. data
* C$ flat at C$1.0279 vs US$, or 97.29 U.S. cents * Bond prices little changed across the curve By Claire Sibonney TORONTO, May 31 (Reuters) - The Canadian dollar was steady against its U.S. counterpart on Thursday, recovering from a near five-month low as expectations of an Irish vote in favor of Europe's fiscal pact helped riskier assets. Opinion polls pointed to a 'Yes' vote in Ireland's referendum, which analysts said could prompt investors to cut some of their hefty bearish bets on the euro and other growth-related currencies. Still, gains were seen limited as concerns grew that Spain may need to seek outside aid as worries over its troubled banks sent Spanish government bond yields soaring. The European Commission on Wednesday offered Spain more time to reduce its budget and direct aid to recapitalise distressed banks, but the news had limited impact on financial markets. Traders also saw end-of-month flows as being Canadian-dollar negative and U.S.-dollar positive. "It's going to continue to be fogged from month-end positioning and rebalancing that's happening on a global scale with all currencies, that's not just a Canadian dollar phenomenon but the Canadian dollar is not going to be kept out of that mix," said C.J. Gavsie, head of foreign exchange products at BMO Capital Markets. "Then we expect a jump right back to the fundamentals that are going in the world and we're starting to see continue strength in the (U.S.) dollar...however we are seeing interest in diversification away from the U.S. dollar into the Canadian dollar with respect to the crosses." At 7:57 a.m. (1157 GMT), the Canadian dollar was at C$1.0279 against its U.S. counterpart, or 97.29 U.S. cents, up slightly from Wednesday's North American session close at C$1.0292 against the U.S. dollar, or 97.16 U.S. cents. Earlier, the currency hit C$1.0313, or 96.96 U.S. cents, its weakest level since Jan. 9. Investors will look to the U.S. ADP employment report and weekly initial jobless claims for clues on the health of the labor market ahead of Friday's key payrolls report. Canadian government bond prices were little changed across the curve with Canada's two-year bond off 1 Canadian cent to yield 1.120 percent, while the benchmark 10-year bond added 3 Canadian cents to yield 1.789 percent..
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