CANADA FX DEBT-C$ weaker ahead of data, BoC decision this week
* C$ at C$1.0301 vs US$, or 97.08 U.S. cents * Wholesale trade rises 0.5 percent in August * Bond prices lower across maturity curve By Leah Schnurr TORONTO, Oct 21 (Reuters) - The Canadian dollar weakened on Monday with investors wary of taking bets ahead of key data reports on both sides of the border this week and an interest rate decision in Canada. Economic data reports delayed by this month's partial U.S. government shutdown will be released in the coming weeks. One of the most important for markets, the unemployment report for September, will be released on Tuesday. At home, investors will also take in Canadian retail sales for August. The shutdown has raised concerns about how much of a bite it will take out of the already fragile U.S. economic recovery. That casts some uncertainty on Canada's economic prospects, as the United States is the country's largest trading partner. Beyond trying to determine the strength of the U.S. recovery, investors are also speculating about what that means for how long the Federal Reserve will maintain the current pace of its economic stimulus efforts. The U.S. non-farm payrolls report is forecast to show the economy created 180,000 jobs last month. Still, the delay has prompted questions about whether there will be any distortions in the data, and a figure that is outside of the consensus may not elicit much market reaction, said Don Mikolich, executive director of foreign exchange sales at CIBC World Markets. "People need to be constantly fed a diet of good economic numbers before they change their view on things," said Mikolich. "To get nice, clear numbers will take now a month or two before we can get what we'll call a clean set of data to really focus in on how the recovery is going." The Canadian dollar ended the North American session at C$1.0301 versus the greenback, or 97.08 U.S. cents, weaker than Friday's close of C$1.0294, or 97.14 U.S. cents. The loonie is likely to trade in a narrow band, from about C$1.0260 to C$1.0315, said Mikolich. Investors were also staying on the sidelines ahead of an interest rate decision from the Bank of Canada, due on Wednesday. The central bank is expected to keep rates steady at 1 percent. The accompanying statement will likely be a bigger focal point, with investors sensitive to any change in tone that might indicate when the bank will eventually raise rates. "The Bank of Canada has held a relatively hawkish tightening (bias) over the last few statements," said Scott Smith, senior market analyst at Cambridge Mercantile Group in Calgary. "The risk is we start to see a little softening of language on the Bank of Canada side of things and maybe looking toward more of an emphasis on boosting export growth and holding off on interest rates until we see that slack removed from the economy." Government bond prices were lower across the maturity curve with the two-year bond off 3-1/2 Canadian cents to yield 1.198 percent and the benchmark 10-year bond falling 17 Canadian cents to yield 2.551 percent.
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