CANADA FX DEBT-C$ edges higher, bonds up before Fed

Wed Nov 3, 2010 8:57am EDT
 
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 * Investors await Fed details on next round of QE
 * C$ rises to 99.21 U.S. cents; parity in sight
 * Bonds prices trade flat to higher
 TORONTO, Nov 3 (Reuters) - The Canadian dollar pushed
higher against the U.S. currency on Wednesday, while government
bonds were flat-to-higher ahead of the U.S. Federal Reserve's
widely-anticipated announcement of a stimulus plan.
 The Fed's statement, due at about 2:15 p.m. (1815 GMT), is
expected to outline the U.S. central bank's second round of
quantitative easing through the purchase of bonds.
 Markets are generally priced for the Fed to commit to
buying between $80 billion and $100 billion worth of assets per
month under a new program to bolster a timid economic recovery.
[ID:nNLLRLE6LL] [ID:nN02172993] 
 Riskier assets advanced as world stocks hit a two-year
high, while U.S. crude oil prices climbed to a six-month high
near $85 for a second straight session. [MKTS/GLOB]
 "Opening the taps for (easing is) obviously empowering the
market to go on a buying spree for riskier assets with the
promise of virtually free money," said John Curran, senior vice
president at CanadianForex, a commercial foreign exchange
dealing firm.
 "I still think there's a lot of hard times ahead. Once we
get past this, it'll be interesting to see what other central
banks say and do. I don't think that this can be a one-way
bet."
 Following the Fed's decision, investors will also contend
with policy decisions from the European Central Bank, the Bank
of England and the Bank of Japan. U.S. and Canadian monthly
jobs data are due on Friday.
 Parity with the U.S. dollar was again a near-term
possibility as the Canadian dollar traded as high as C$1.0064
to the U.S. dollar, or 99.36 U.S. cents.
 At 8:40 a.m., the Canadian dollar was at C$1.0080 to the
U.S. dollar, or 99.21 U.S. cents, up from C$1.0095 to the U.S.
dollar, or 99.06 U.S. cents, at the previous close.
 The two-year bond CA2YT=RR  edged up 1 Canadian cent to
yield 1.419 percent, while the 10-year bond CA0YT=RR rose 20
Canadian cents to yield 2.850 percent.
 (Reporting by Ka Yan Ng; Editing by Padraic Cassidy)