3 Min Read
* C$ hits highest level since July 2008
* Looming data and rate decision in focus
* Bond prices mixed across curve
By Frank Pingue
TORONTO, Oct 15 (Reuters) - Canada's currency slid against the U.S. dollar on Thursday and backed off a near 15-month high reached overnight as looming domestic inflation data and an expected interest rate announcement forced traders to reposition.
During the overnight session, the Canadian currency CAD= rose to C$1.0207 to the U.S. dollar, or 97.97 U.S. cents, which marked its highest level since July 2008.
The rally built on momentum from Wednesday's North American session after upbeat U.S. corporate results boosted investor optimism about a global recovery as well as risk appetite.
But the move was reversed ahead of Canadian consumer prices data for September due Friday and next week's Bank of Canada rate announcement, when investors will look closely for clues about the timing of the next rate hike.
The turnaround in the Canadian dollar follows a mostly uninterrupted rise this month that left it within striking distance of rising above the U.S. dollar for the first time since July 2008.
"Things have been too perfect for the Canadian dollar for the past little while, and so it needs to have a period of retrospection, and I think that's what we are getting now," said David Watt, senior currency strategist at RBC Capital Markets.
"Is it really an environment where you want to drive the Canadian dollar to parity and potentially force the Bank of Canada's hand, or just say it's been a nice run. Now let's take it back to a more reasonable level at the present time."
At 8:00 a.m. (1200 GMT), the Canadian unit was at C$1.0331 to the U.S. dollar, or 96.80 U.S. cents, down from C$1.0259 to the U.S. dollar, or 97.48 U.S. cents, at Wednesday's close.
Domestic bond prices were mixed across the curve ahead of data expected to show Canadian factory sales fell 0.4 percent in August from July. In July, factory sales surged 5.5 percent from the prior month. (Editing by Jeffrey Benkoe)