CANADA FX DEBT-C$ steady as Fed, Bank of Canada comments weighed
(Adds analyst's comment, details, closing figures) * Canadian dollar at C$1.1196 or 89.32 U.S. cents * Bond prices mostly higher across the maturity curve By Solarina Ho TORONTO, Oct 30 (Reuters) - The Canadian dollar held steady against a stronger greenback on Thursday as investors limited their bets and mulled over the implications of the more hawkish tone adopted by the U.S. Federal Reserve and comments by the governor of the Bank of Canada. In its latest statement, the Fed said on Wednesday it was ending its monthly bond purchase program and dropped a characterization of U.S. labor market slack as "significant" in a show of confidence in the economy. After markets closed on Wednesday, Bank of Canada Governor Stephen Poloz said he welcomed the Fed's latest move, saying it showed the U.S. economy is gaining traction, but he warned weaker oil prices will crimp Canadian growth. "I don't think it's just the loonie which is being sidelined here. After yesterday's (Fed) announcement, the (U.S.) dollar got its big move. Now everybody's just sitting there, digesting it," said Amo Sahota, director at Klarity FX in San Francisco. "For USD/CAD, it's kind of gone into this stagnant phase ... The market's also trying to digest the comments by Poloz last night." The Canadian dollar closed at C$1.1196 to the U.S. dollar, or 89.32 U.S. cents, little changed from Wednesday's finish of C$1.1191, or 89.36 U.S. cents. The loonie did recoup most of its early-session losses after data showed the U.S. economy grew at a more robust pace than expected in the third quarter. But details in the report hinted at some loss of momentum, with the pace of business-investment, housing and consumer-spending growth slowing from the previous quarter. "Maybe markets were looking through the headline as they should," said Benjamin Reitzes, senior economist and foreign exchange strategist at BMO Capital Markets. "The details of the report were not quite as firm as the headline. Domestic demand was not all that great in the U.S." Reitzes said the Canadian currency is likely to be confined to a range between C$1.11 and C$1.14 for the remainder of the year unless there is a major catalyst or another big fall in oil prices. He added that attention will likely remain focused on the Fed in the near term. Canadian government bond prices were mostly higher across the maturity curve, with the two-year rising almost 1 Canadian cent to yield 1.038 percent and the benchmark 10-year rising 10 Canadian cents to yield 2.046 percent. (Reporting by Solarina Ho; Editing by Peter Galloway)
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