CANADA FX DEBT-C$ falls after rising for six sessions

Thu Dec 16, 2010 4:46pm EST
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 * C$ slips to 99.41 U.S. cents
 * Canadian bond prices tick up across curve
 (Updates to close)
 TORONTO, Dec 16 (Reuters) - Canada's dollar took a small
step lower against the U.S. dollar on Thursday after coming
within a tick of parity with the U.S. currency the day before
at the end of a six-session rally.
 The Canadian dollar CAD=D4 finished at C$1.0059 to the
U.S. dollar, or 99.41 U.S. cents, down from Wednesday's close
of C$1.0040 to the U.S. dollar, or 99.60 U.S. cents.
 The currency had edged slightly higher in each of the six
previous sessions, but there were few headlines to nudge it out
of a tight trading range.
 "In essence what I think we've been seeing over the past
few days is that we tend to get these relatively big swings
intraday and then we revert to somewhere close to the opening
level," said Shaun Osborne, chief currency strategist at TD
 "It does indicate there is a bit more uncertainty. We don't
seem to be able to get any sort of traction intraday one way or
the other."
 Soft equity and commodity markets on Thursday dented
enthusiasm for the Canadian currency, while news headlines did
not have a lasting impact.
 The currency shrugged off data that showed foreigners
favored Canadian corporate bonds in October. [ID:nN16134503]
 U.S. data showed the economy appeared to be gaining
traction with new claims for jobless aid falling last week and
factory activity this month in the Mid-Atlantic region growing
at its quickest pace in more than 5-1/2 years.
 The reports added to growing evidence of a substantial
pick-up in U.S. economic growth during the fourth quarter, even
though housing data pointed to continued stress in that sector.
 For the most part, however, the Canadian currency took a
breather after rising as high as C$1.0001 to the U.S. dollar,
or 99.99 U.S. cents, on Wednesday, said Blake Jespersen,
director, foreign exchange sales at BMO Capital Markets.
 "It took a good run at parity, but just ran into too many
sellers of the Canadian dollar," he said. "The fact that it's
still hanging very close to that level means, I think, we're
going to eventually take it out."
 Bonds rallied across the curve on Thursday, partly as
riskier assets, such as Canadian equities, fell out of favor.
 Canadian government bonds put in a mixed performance
against their U.S. counterparts. The interest-rate sensitive
two-year bond CA2YT=RR rose 9 Canadian cents to yield 1.686
percent, while the 10-year bond CA10YT=RR climbed 50 Canadian
cents to yield 3.267 percent.
 (Reporting by Ka Yan Ng; editing by Peter Galloway)