CANADA FX DEBT-C$ helped higher by risk rebound
* C$ firms to C$1.0190 vs US$, or 98.14 U.S. cents * Currency largely outperforms against majors * Bond prices lower across the curve * Markets eye U.S. Fed minutes By Claire Sibonney TORONTO, July 11 (Reuters) - The Canadian dollar was slightly stronger against the U.S. dollar on Wednesday, helped by firmness in commodity prices and after recent weakness on concerns over Europe's debt crisis and its impact on growth. Crude oil futures got a boost on Wednesday on expectations that there may be more signals of economic stimulus from the U.S. Federal Reserve when minutes of its meeting last month are released later in the day. Gold and base metals were also firmer. "We're seeing a small boost to the Canadian currency coming from higher commodity prices," said Charles St-Arnaud, economist and currency strategist at Nomura Securities in New York. "That's helping to support the Canadian dollar. But there's still concern out there about what's happening in Europe and also what could be announced by the Fed this afternoon." Investors were awaiting the release of minutes from the U.S. Federal Reserve's June meeting, which they will scrutinize for any hints of another round of asset buying in the coming months. The Fed last week decided to extend a bond maturity-extension programme called Operation Twist. But doubts remain as to Twist's effectiveness. At around 12:20 p.m. (1620 GMT), the Canadian currency stood at C$1.0190 versus the U.S. dollar, or 98.14 U.S. cents, slightly firmer than Tuesday's North American session close at C$1.0226 against the greenback, or 97.79 U.S. cents. Canada's dollar has ebbed and flowed in recent sessions on global economic data and developments related to the euro zone's financial stability. Most recently, a German debt sale underlined the growing lack of faith by some investors in measures agreed by European policymakers last month to combat the crisis, including help for Spain's banks and allowing the region's new rescue fund to buy government debt. These concerns were heightened by lack of clarity from euro zone finance ministers on implementing the measures and questions about when Germany's Constitutional Court would give its verdict on the new regional bailout fund, known as the European Stability Mechanism. Still, the currency largely outperformed against major currencies such as the yen and euro. Against the euro, the Canadian dollar rose to C$1.2468, or 80.21 euro cents, its strongest since June 2010. But the Canadian currency slid against its Australian counterpart. "At least at the moment, we're having a better perception of risk today I think (that) is providing some short-term impetus," said Jeremy Stretch, head of currency strategy at CIBC in London. "The question as to how far this can actually take us and whether this risk rebound is really durable, I'm not so convinced as yet." Canadian bond prices were lower across the curve. The two-year government bond was down 5 Canadian cents to yield 0.993 percent, while the benchmark 10-year bond sank 20 Canadian cents to yield 1.675 percent.
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