CANADA FX DEBT-Canadian dollar eases as QE rally runs out of steam
* C$ at C$0.9730 vs US$, or $1.0277 U.S. cents * Bond prices edge higher across the curve By Claire Sibonney TORONTO, Sept 17 (Reuters) - The Canadian dollar slipped against its U.S. counterpart on Monday, easing further from 13-month highs hit in the previous session as investors continued to book profits and reassess the impact of yet another round of U.S. monetary stimulus. Promised support from the U.S. and euro zone central banks have propelled the risk-related Canadian currency up nearly 8 percent since its lows in June. The Fed announced last week that it plans to pump an extra $40 billion a month into the economy until jobs data improves, while the European Central Bank outlined its new bond-buying initiative earlier in the month. "Obviously the thought of open-ended QE is a bit shocking and ... it shows how desperate the Fed is at the moment, so in a lot of ways it's not really a good thing," said Steve Butler, director of foreign exchange trading at Scotiabank. At 8:12 a.m. (1212 GMT), the Canadian dollar was at C$0.9730 versus the greenback, or $1.0277, weaker than Friday's finish at C$0.9712 versus its U.S. counterpart, or $1.0297. Grim Canadian manufacturing sales data on Friday also dampened some investor enthusiasm that was built up over the broader risk rally. "The market is probably a little bit overextended," added Butler. "I think it feels like the market is still looking to buy Canada but possibly holding out for better levels closer to C$0.98 now." Data that showed China's factory sector shrank for an eighth straight month in June also weighed on commodity prices and Canada's resource-linked currency. Canadian government bond prices inched up across the curve as safe-haven assets came back into play. The two-year bond was up 2 Canadian cents to yield 1.189 percent, while the benchmark 10-year bond added 8 Canadian cents, yielding 1.961 percent.
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