CANADA FX DEBT-C$ stabilizes, but posts worst month since January
* Canadian dollar at C$1.0904 or 91.71 U.S. cents * Bond prices mostly higher across the maturity curve (Recasts throughout; adds quotes, details, updates prices) By Leah Schnurr TORONTO, July 31 (Reuters) - The Canadian dollar was little changed against the greenback on Thursday, pulling back from a more than seven-week low hit earlier in the day, though the loonie still suffered its worst month since January. The day's trade offered a small respite for the currency, which has declined sharply in three of the last five sessions as it has been hurt by a wave of support for the U.S. dollar on optimism that the recovery south of the border is picking up steam. Data that showed a better-than-expected pace of growth for the Canadian economy in May gave some support to the loonie, while the currency was likely also influenced by month-end positioning by investors, said Adam Button, currency analyst at ForexLive in Montréal. Canada's economy grew by 0.4 percent in May, the fifth monthly increase in a row and topping expectations for 0.3 percent growth. "Looking through the details, there was broad-based strength in services, manufacturing, a lot of the industries that could continue to sustain solid growth in Canada," said Button. The Canadian dollar ended the North American session at C$1.0904 to the greenback, or 91.71 U.S. cents, a tad weaker than Wednesday's close of C$1.0901, or 91.73 U.S. cents. The loonie was down 2.1 percent for July, its first monthly decline since January, when the currency was hit by a steep selloff. Most analysts still expect the loonie has further to fall, with many looking for it to hit C$1.10 in the coming months. The Canadian dollar's recent drop through a series of key resistance points has added to its downward momentum, making for a 1.4 percent decline since last Friday. "There's very little technically to support the Canadian dollar here," said Button. "A one-day bounce on a tough day in the market is nice, but it won't change anyone's opinion of the Canadian dollar." Canadian government bond prices were mostly higher across the maturity curve, with the two-year up 1-1/2 Canadian cents to yield 1.099 percent, but the benchmark 10-year was off 2 Canadian cents to yield 2.166 percent. (Editing by G Crosse)
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