CANADA FX DEBT-C$ firms on U.S. data, rethink of Fed stance
* Canadian dollar at C$1.0947 or 91.35 U.S. cents * Bond prices lower across the maturity curve (Adds details, quotes, updates prices) By Leah Schnurr TORONTO, Sept 18 (Reuters) - The Canadian dollar firmed against the greenback on Thursday as investors reassessed the previous day's policy statement from the U.S. Federal Reserve, while markets globally were bracing for the results of Scotland's independence referendum. The loonie was also supported by weak housing data south of the border, as well as data at home that showed foreign investors resumed buying Canadian securities in July. The currency recovered much of the ground lost in a selloff the previous session that was sparked by a Fed indication that it could move at a faster pace than expected once it starts raising interest rates, even as it repeated that rates will stay low for a "considerable time". Currency markets had focused on the Fed's rate projections on Wednesday, but they were giving that a rethink on Thursday. "I think the rate and currency markets essentially looked too much into the dot charts and the increase in hawkishness for interest rate projections, whereas when you look at the statement, (Fed Chair Janet) Yellen and the voting members were still dovish," said Scott Smith, senior market analyst at Cambridge Mercantile Group in Calgary. "To some extent, we could see a little pullback in U.S. dollar-Canadian dollar just on the fact that the run-up yesterday was a little overdone when you weigh everything." The Canadian dollar ended the North American session at C$1.0947 to the greenback, or 91.35 U.S. cents, stronger than Wednesday's close of C$1.1004, or 90.88 U.S. cents. The loonie is up more than 1 percent for the week so far, clawing back about half of the currency's declines from last week. It touched technical resistance at C$1.11 earlier in the week but was unable to break through that barrier. "The fact that we really failed at the C$1.11 highlights even more so that for right now U.S. dollar-Canadian dollar seems very comfortable just either side of C$1.10," said Camilla Sutton, chief currency strategist at Scotiabank in Toronto. The British pound firmed against the loonie on investor hopes that Scotland would not choose to abandon its union with England. The result of the vote is not expected until early on Friday. "One thing that could hem in the pound a bit, so that it doesn't rally too far, is if there is a small 'no' majority, it could likely be a situation like what we had in Canada with Quebec, where an independence referendum is always in the back of a competing party's mind," Smith said. Canadian government bond prices were lower across the maturity curve, with the two-year off 1 Canadian cent to yield 1.172 percent and the benchmark 10-year down 17 Canadian cents to yield 2.288 percent. (Editing by James Dalgleish)
© Thomson Reuters 2017 All rights reserved.