3 Min Read
* C$ ends flat at C$1.0065 versus US$, or 99.35 U.S. cents * Markets look ahead to U.S., Canada GDP and Fed meeting * Lost 1.5 pct last week after dovish Bank of Canada By Claire Sibonney TORONTO, Jan 28 (Reuters) - The Canadian dollar was unchanged against its U.S. counterpart on Monday as investors took a cautious stance ahead of key U.S. economic data and the Federal Reserve's first policy meeting of the year later in the week. Still, the currency recovered from a six-month low hit earlier in the day, taking some direction from firmer commodity prices after a gauge of planned U.S. business spending rose in December, while rating agency Fitch scaled back the chance it will strip the United States of its AAA status. "(The Canadian dollar) started out quite weak. All of the commodity currencies were a bit under the gun ... but realistically it was quite quiet trading and it wasn't really a big driver ahead of Wednesday where we get a lot of news in terms of GDP in the U.S. and the (Fed)," Mark Chandler, head of fixed income and currency strategy at RBC Capital Markets, said. On Wednesday, investors will be paying close attention to U.S. fourth quarter GDP figures and the Federal Open Market Committee's policy announcement. Canada's November growth numbers are due on Thursday. The Canadian dollar ended the North American session at C$1.0065 to the greenback, or 99.35 U.S. cents, the exact same level as Friday's close. It slipped 1.5 percent last week. Earlier in the day, the Canadian dollar had matched a late-July low of C$1.01 versus the greenback, or 99.00 U.S. cents, as the Bank of Canada's softer tone on interest rate hikes last week continued to put pressure on the currency. The central bank said last week it would hold rates steady for longer than it had previously expected, with tepid inflation data later in the week backing up that stance. That pushed the Canadian currency to less than equal value with the greenback for the first time in months. RBC on Friday pushed out its forecast for the next hike by two quarters from the third quarter of 2013 to the first quarter of next year, citing heightened worries over domestic capital expenditures due to weak energy prices and the gap between Canadian oil and global benchmarks. If the currency falls through the key C$1.01 level, it could easily hit C$1.02 and potentially even reach C$1.03 in coming weeks, said Greg Moore, foreign exchange strategist at TD Securities. He saw decent Canadian-dollar resistance at C$0.9970. Canadian bond prices retreated across the curve. The two-year bond was off 3 Canadian cents to yield 1.155 percent, while the benchmark 10-year bond fell 17 Canadian cents to yield 1.967 percent.