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* C$ at C$0.9733, or $1.0274
* Bond prices firmer across curve as risk appetite wanes
By Solarina Ho
TORONTO, June 22 (Reuters) - The Canadian dollar was slightly weaker against its U.S. counterpart on Wednesday, mirroring a retreat in global equities and commodities as markets positioned themselves ahead of the U.S. Federal Reserve policy announcement.
The market will be looking to the Fed for clues about its handling of the faltering economic recovery. The central bank is likely to acknowledge renewed weakness in the economy in a post-meeting statement but may not take any action. For more see[ID:nN1E75K22F].
"The market again is on hold, awaiting the Fed and (Fed Chairman Ben) Bernanke. And even though it's more likely going to be a non-event, it's seemingly another reason to not do a whole lot of trading," said Darcy Browne, managing director of capital markets trading at CIBC.
"The volumes had been reduced because of the uncertainty. People are waiting for more pieces of the puzzle to put together before they apply the risk. Yesterday, we waited for Greece ... and now we're waiting for the Fed. It's just this waiting game."
At 8:18 a.m. (1218 GMT), the currency CAD=D4 stood at C$0.9733 to the U.S. dollar, or $1.0274, weaker than Tuesday's North American finish at C$0.9724 or $1.0284.
The markets rallied on Tuesday, optimistic about the expected outcome of a confidence vote in Greece. The government survived the vote to avoid a debt default which helped ease concerns on the vulnerability of risky assets.
"It's up and down with commodities, and equities, and risk sentiment and to-ing and fro-ing, and we're right in the middle of a range. There's no new fundamental news out of Canada to push the currency one way or another," said Browne.
With oil a key Canadian export, the commodity-linked Canadian dollar often moves in tandem with crude prices. Oil slipped as investors were cautious ahead of the Fed meeting and on lingering anxiety over the state of the euro zone. [O/R]
Browne expected the currency to trade between C$0.9700 and C$0.9770 on Wednesday, and sees resistance around C$0.9650 in the short term and headwinds past the C$0.9850-C$0.9900 level.
The retreat was reflected in higher Canadian government prices across the curve as investors edged back toward safety.
The two-year bond CA2YT=RR rose 3 Canadian cents to yield 1.505 percent, while the 10-year bond CA10YT=RR climbed 15 Canadian cents to yield 2.963 percent. (Editing by James Dalgleish)