CANADA FX DEBT-Merger news, data optimism boosts loonie nearly 1 pct
* Canadian dollar at C$1.0855 or 92.12 U.S. cents * 10-yr bond yield lowest since May 2013 (Adds market details, analyst quotes, updates prices) By Leah Schnurr TORONTO, Aug 27 (Reuters) - The Canadian dollar surged nearly 1 percent against the greenback on Wednesday, rising to its highest level in nearly a month as it benefited from corporate takeover news and speculation that economic growth data might come in stronger than expected at the end of the week. The sharp move gained steam through the session and sent the currency pairing through short-term resistance around the C$1.09 area, as well as its 100- and 200-day moving averages. On Tuesday, Burger King Worldwide Inc said it plans to buy Canada's Tim Hortons Inc in a C$12.64 billion cash-and-stock deal. Such merger and acquisition activity can boost demand for the loonie, as a foreign buyer would need to pick up Canadian dollars to fund the deal. "It seems there's quite a lot of speculation around M&A flows," said Greg Moore, senior currency strategist at Royal Bank of Canada in Toronto. "With this type of transaction, it's impossible to time when those flows would happen, so a move like this is speculation more than anything." The Canadian dollar ended the North American session at C$1.0855 to the greenback, or 92.12 U.S. cents, significantly stronger than Tuesday's close of C$1.0952, or 91.31 U.S. cents. The loonie also got some help from a broadly softer U.S. dollar, which was down 0.2 percent against a basket of currencies. After a quiet economic calendar this week, investors are also focusing increasingly on the gross domestic product report due on Friday. The economy is forecast to pick up to a 2.7 percent rate of growth in the second quarter, bouncing back from a slowdown in the first three months of the year. Analysts said there is some risk that growth could accelerate more than the market expects, which would be positive for the loonie. Even so, it would be unlikely to cause the Bank of Canada to alter its cautious tone when it releases its monetary policy statement next week, said David Tulk, chief Canada macro strategist at TD Securities in Toronto. "We've seen this from the bank time and time again; anything that looks like it's either stronger than forecast or something with a seemingly positive undertone, they are inclined to find the dark cloud hanging somewhere out in the distance," Tulk said. "That's their overarching strategy, just to sound as cautious as they can." Investors will also get a look at second-quarter current account numbers on Thursday, though that is not expected to have much impact on the market. Canadian government bond yields fell across the board, with the yield on the benchmark 10-year at its lowest level since May 2013 at 2.007 percent. The two-year was up half a Canadian cent in price to yield 1.103 percent. (Editing by Grant McCool)
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