CANADA FX DEBT-C$ little changed as investors await Fed, data
* C$ at C$1.0277 vs US$ or 97.30 U.S. cents * Fed policy debate in focus, U.S. dollar under pressure * Bond prices mixed By Andrea Hopkins TORONTO, July 29 (Reuters) - The Canadian dollar held steady near a five-week high against the U.S. dollar on Monday as expectations the Federal Reserve will reaffirm its pledge to keep U.S. interest rates near zero kept the greenback on the defensive. Investors are in wait-and-see mode before meetings this week of the Fed, the European Central Bank and the Bank of England. All are expected to repeat or refine their "forward guidance" that borrowing costs will remain extraordinarily low as long as growth is sub-par and inflation poses no threat. The Fed will be most closely scrutinised, having signalled plans to begin phasing out its money-printing stimulus this year. Most economists are eyeing a September start but markets have scaled back views of any aggressive changes. "Everyone is waiting for the Fed, the FOMC (Federal Open Market Committee) meeting on Wednesday, which should dictate the next month or so of trading. The market is definitely dovish, expecting the Fed to maintain its bias to keep interest rates low for an extended period of time," said John Curran, senior vice president at CanadianForex. The U.S. dollar has been under pressure, giving back three-quarters of June's 5 percent gain and hitting a five-week low against a basket of currencies and one-month low against the yen. At 9:26 a.m. (1326 GMT), the Canadian dollar was at 1.0277 versus the U.S. dollar, or 97.30 U.S. cents, little changed from Friday's North American session close at C$1.0273 versus the U.S. dollar, or 97.34 U.S. cents. The currency touched a five-week high last week, and Curran said he expects it to trade in a tight range until Wednesday. "The Canadian dollar seems to be getting back to middle-of-the-road levels for recent months. I would look for anything towards the C$1.02 area to be well supported for the U.S. dollar - people wanting to sell Canadian dollars there," said Curran. "On the top side, it would have to break above C$1.035 to get interesting," he added. Canada and the United States, its largest export market, will release economic growth data this week, while the United States also will issue July jobs data. The price of Canadian government debt was mixed. The two-year bond fell 1 Canadian cent to yield 1.153 percent, while the benchmark 10-year bond fell 12 Canadian cents to yield 2.466 percent.
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