CANADA FX DEBT-C$ little changed as investors look to Bank of Canada
* Canadian dollar at C$1.1284 or 88.62 U.S. cents * Bond prices mostly higher across the maturity curve (Adds details, quotes, updates prices) By Leah Schnurr TORONTO, Oct 20 (Reuters) - The Canadian dollar was little changed against the greenback on Monday, supported by figures showing an unexpected rise in domestic wholesale trade in August, while investors were looking ahead to the Bank of Canada's policy statement later this week. Markets globally were calmer than last week, when investors fled to safe havens on worries about the outlook for the world economy. Those concerns drove the Canadian dollar to a more than five-year low but it has clawed back some gains since then. Data showed Canadian wholesale trade rose 0.2 percent in August to the second-highest level ever and contrary to market expectations for a decline of 0.2 percent. The week's main event, however, will be the monetary policy statement from the Bank of Canada due on Wednesday. The bank will also update its economic forecasts and is widely expected to hold its key interest rate at 1 percent, where it has been for four years. The central bank is seen likely to keep sending a cautious message, particularly in light of last week's market turmoil, even after data last week showed inflation in September was at the bank's 2 percent target. "They'll be pointing to global growth concerns, sagging oil prices, stock market volatility as reasons to maintain their current dovish stance," said Don Mikolich, executive director of foreign exchange sales at CIBC World Markets in Toronto. "I don't know if the market will necessarily react too negatively to it. We've come to expect that tone a bit, and certainly with the environment around it, it would seem justified," Mikolich said. The Canadian dollar ended the North American session at C$1.1284 to the greenback, or 88.62 U.S. cents, slightly weaker than Friday's close of C$1.1277, or 88.68 U.S. cents. The loonie fell as far as C$1.1385 last week, its lowest since July 2009. The previous low for 2014 had been hit in March. The currency is likely to oscillate around the C$1.13 area until the Bank of Canada statement is released, said Rahim Madhavji, president at KnightsbridgeFX.com in Toronto. In the meantime, the loonie is likely to take its cues from broader markets, he said. "What's driving the market right now is still a U.S. dollar story; it's still overall risk sentiment," said Madhavji. "If it continues to be slightly negative or cautious, we'll continue to see the U.S. dollar do well." Canadian government bond prices were mostly higher across the maturity curve, with the two-year up 2-1/2 Canadian cents to yield 0.965 percent and the benchmark 10-year up 17 Canadian cents to yield 1.933 percent. (Editing by James Dalgleish)
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