CANADA FX DEBT-C$ choppy, bonds higher ahead of US data

Tue Sep 1, 2009 9:26am EDT
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   * C$ nearly unchanged vs Monday, volatile overseas moves
 * Bond prices higher across curve
 * U.S. home sales, ISM manufacturing index awaited
 TORONTO, Sept 1 (Reuters) - Canada's dollar was little
changed on Tuesday while bond prices were slightly higher
following mixed European data and ahead of U.S. economic
reports set to test the strength of recovery.
 The Canadian dollar pared gains as data emerged in Europe.
An unexpected dip in U.K. manufacturing activity in August
stoked concerns about the pace of recovery in the British
economy, while the euro zone purchasing managers' index rose
more than expected and German unemployment unexpectedly fell in
August. [ID:nL1662667] [ID:nLAG003701] [ID:nLAG003703]   
 "While it opens the North American session more or less
unchanged against the New York close yesterday, there's been a
fair amount of intraday volatility in the Asian and European
markets," said Jack Spitz, managing director of foreign
exchange at National Bank Financial.
 Further direction is likely to come from stock markets and
U.S. data, which includes U.S. pending home sales and the
August reading for the Institute for Supply Management's
manufacturing index. Both are due at 10 a.m. (1400 GMT).
 Canadian bond prices were slightly higher as North American
stock markets pointed to a lower open due to ongoing concerns
over the strength of economic recovery. Bonds tend to rise when
risk appetite wanes.
 The Canadian currency rose as high as C$1.0872 to the U.S.
dollar, or 91.98 U.S. cents, as Chinese shares stabilized after
Monday's selloff.
 At 9:20 a.m. (1320 GMT), the Canadian dollar was at
C$1.0980 to the U.S. dollar, up from C$1.0950, or 91.32 U.S.
cents, at Monday's close.
 Meanwhile, steadying prices for crude oil, a key Canadian
export, contributed to a steadier tone to the Canadian dollar
in early trading as well. Earlier, oil was below $70 a barrel.
 Traders also cited news that PetroChina PTR.N0857.HK is
set to pay C$1.9 billion for a 60 percent stake in two planned
Canadian oil sands projects as a positive factor for the
Canadian dollar. [ID:nN31233511]
 There is no Canadian data until this Friday's key jobs
report, which is expected to show the economy shed 10,000 jobs
in August while the unemployment rate is pegged to rise to 8.7
 The two-year bond CA2YT=RR rose 2 Canadian cents to
C$99.47 to yield 1.272 percent, while the 10-year bond
CA10YT=RR rose 5 Canadian cents to C$103.17 to yield 3.365
 The 30-year bond CA30YT=RR edged up 5 Canadian cents to
C$118.80 to yield 3.886 percent.
 (Reporting by Ka Yan Ng; Editing by Andrew Hay)