CANADA FX DEBT-Canada dollar firms before Fed, Carney speech
* C$ rises to 94.38 U.S. cents
* Bond prices little changed
* Bank of Canada Governor speech, Fed statement on tap
TORONTO, Dec 16 (Reuters) - The Canadian dollar was firmer against the U.S. currency on Wednesday morning, while government bonds were little changed, as markets marked time ahead of two key central bank events later in the day.
Bank of Canada Governor Mark Carney will deliver a speech in Toronto and the U.S. Federal Reserve will release its latest policy statement. The market will be watching both for hints on when the two central banks will start raising interest rates.
Both the Fed and the Bank of Canada have said rates should stay low for the next while. Recent strong economic data, however, has raised concern about inflation and sparked questions about whether the Fed will stick to its pledge.
The Bank of Canada warned recently that household debt poses an increased risk to the economy.
"The bank has started to raise some concern about maybe some asset bubbles, primarily real estate in Canada, as well as a lower savings rate amongst the Canadian population," said Firas Askari, head of foreign exchange trading at BMO Capital Markets.
"This is by no means letting loose the hounds on hawkish talk or higher rates immediately, but I think they're going to have a hard time holding onto a stationary policy on rates past the date they've given us in the summer."
Carney's speech, "Current Issues in Household Finances", is scheduled to begin at 1:05 p.m. (1805 GMT). The Fed policy statement is due at 2:15 p.m. (1915 GMT).
The Canadian currency firmed after data showed Canadian manufacturing sales rose twice as much as expected in October from September, jumping 2 percent on strength in the aerospace, energy and auto industries. [ID:nN163200]
At 9:40 a.m. (1440 GMT), the Canadian dollar was at C$1.0595 to the U.S. dollar, or 94.38 U.S. cents, up from C$1.0614 to the U.S. dollar, or 94.22 U.S. cents, at Tuesday's close.
The two-year Canadian government bond CA2YT=RR was up 1 Canadian cent at C$99.94 to yield 1.281 percent, while the 10-year bond CA10YT=RR dipped 1 Canadian cent to C$102.76 to yield 3.406 percent. (Reporting by Ka Yan Ng; editing by Peter Galloway)
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