CANADA FX DEBT-C$ sags ahead of Bank of Canada rate announcement
* C$ at C$1.0859 to the U.S. dollar, or 92.09 U.S. cents
* Bank of Canada rate announcement key event
TORONTO, Sept 10 (Reuters) - The Canadian dollar CAD=D3 retreated against the U.S. currency on Thursday as risk appetite faltered with world stocks and the market was focused on the Bank of Canada's key rate announcement this morning.
While no change is expected on the interest rate front, investors are closely watching whether the central bank will keep up pressure on markets to back off the Canadian dollar. It may also express confidence in its view that the economy is bouncing back. [ID:nN08189274]
The market will also be looking for comments about potential changes to its conditional rate level, as well as the inflation outlook, said Matthew Strauss, senior currency strategist, RBC Capital Markets.
"Those will be the three focus areas to see whether there are any changes. Our view is we don't think there are going to be any material changes," said Strauss.
At 8:23 a.m. (1223 GMT), the Canadian dollar was at C$1.0859 to the U.S. dollar, or 92.09 U.S. cents, down from Wednesday's close at C$1.0810 to the U.S. dollar, or 92.51 U.S. cents.
The currency was pressured by weaker world stocks and U.S. stock index futures, which pointed to a flat open, diminishing the appeal for assets perceived to be riskier. [MKTS/GLOB] [.N]
As well, commodity prices were mixed and were not likely to sway the currency significantly, said Strauss.
Domestic government bonds were flat ahead of the Bank of Canada's statement with many investors on the sidelines before the event. (Reporting by Jennifer Kwan; Editing by Jeffrey Hodgson)
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