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* C$ slightly lower at 97.95 U.S. cents
* Bonds follow U.S. Treasures higher
By Jennifer Kwan
TORONTO, Oct 4 (Reuters) - Canada's dollar slipped slightly against the U.S. currency on Monday morning as the greenback regained its footing following recent weakness on speculation the U.S. Federal Reserve may further ease monetary policy.
At 9:15 a.m. (1315 GMT), the currency CAD=D4 was at C$1.0209 to the U.S. dollar, or 97.95 U.S. cents, after earlier soaring as high as C$1.0180 to the U.S. dollar, or 98.23 U.S. cents, its strongest since Aug. 6. On Friday, the currency finished at C$1.0205 to the U.S. dollar, or 97.99 U.S. cents.
The dollar rose on Monday, recovering earlier losses as traders cut bets the currency will weaken, which have been piling up on speculation the Federal Reserve may buy bonds to support the economy in a process known as quantitative easing. [FRX/]
"There's been strong interest below C$1.02 from a corporate base to buy U.S. dollar, said David Bradley, director of foreign exchange trading at Scotia Capital, noting when the currency trades below C$1.0190 to the U.S. dollar "we see strong demand."
"We've been in such a tight range in dollar/Canada recently that I think the corporate base we have, non-exporter types and especially some of our customers south of the border, are looking to pick up U.S. dollars on any moves on extreme levels of the range."
Market watchers have said the Canadian dollar has been recently stuck in a range between C$1.02 to C$1.03 to the U.S. dollar.
Investors will look to a string of economic data this week for more direction, including U.S. reports on Monday such as pending home sales, durable good orders and factory orders, all for August. [ECONUS]
Canadian government bond prices were flat to higher, along with U.S. Treasury prices where debt prices climbed on the broader prospect of quantitative easing by the U.S. central bank. [US/]
The two-year bond CA2YT=RR ticked 1 Canadian cent higher to yield 1.369 percent, while the 10-year bond CA10YT=RR added 13 Canadian cents to yield 2.780 percent. (Editing by Chizu Nomiyama)