CANADA FX DEBT-C$ breaks out of recent range to hit 2-week high
* Canadian dollar at C$1.0970 or 91.16 U.S. cents * Bond prices lower across the maturity curve By Leah Schnurr TORONTO, April 29 (Reuters) - The Canadian dollar strengthened to a nearly two-week high against the greenback on Tuesday, breaking out of its recent range as investors positioned for a busy week that could shed insight on monetary policy on both sides of the border. After trading sideways in recent weeks, the gains brought the Canadian dollar close to breaking through its 100-day moving average. The currency had been content to hover around the C$1.10 level in recent sessions as investors weighed a modest strengthening of domestic economic data against the central bank's still-neutral policy stance. Investors will get a chance to assess that stance this week with Bank of Canada policymakers due to answer questions from parliamentarians on Tuesday and Wednesday. Bank Governor Stephen Poloz and Deputy Senior Governor Tiff Macklem were set to face the House of Commons finance committee at 3:30 EDT (1930 GMT) on Tuesday. Later in the week, markets will take in a policy statement from the U.S. Federal Reserve as well as Canadian monthly gross domestic product figures and a slew of U.S. economic data. "I think there's lots of a reshifting of risk positions just leading into the amount of risk we have in the next 24 hours - everything from Governor Poloz, to the Fed, to inflation data out of Europe," said Camilla Sutton, chief currency strategist at Scotiabank in Toronto. The Canadian dollar hit a 4-1/2-year low in March before bouncing higher, though that rally had largely lost momentum this month. "The weak Canadian dollar story has certainly faded over the last several weeks, and increasingly it's a far more neutral outlook and that's seeing some position unwinding of those who have been short the Canadian dollar for some time now," Sutton said. The Canadian dollar was at C$1.0970 to the greenback, or 91.16 U.S. cents, on Tuesday morning, stronger than Monday's close of C$1.1025, or 90.70 U.S. cents. The Canadian dollar entered the year as a favorite short trade for some investors and many analysts still expect it to weaken substantially before the end of 2014. There would need to be either a build in positive sentiment over the currency or a shift away from Poloz's dovish stance to suggest that a bullish turn is taking place for the Canadian dollar, Sutton said. "We haven't seen really either of those, so I think for now for the U.S. dollar-Canadian dollar, it's still a story of either side of C$1.10 as a very comfortable place." Canadian government bond prices were lower across the maturity curve, with the two-year off Canadian cents 0.8 to yield 1.081 percent and the benchmark 10-year down 6 Canadian cents to yield 2.455 percent. (Editing by Peter Galloway)
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