CANADA FX DEBT-C$ hits session high after U.S. durable goods
* C$ up at C$0.9869 to the U.S. dollar, or $1.0133
* Bond prices mostly higher
* Strong U.S. durable goods data supports risk sentiment
By Ka Yan Ng
TORONTO, Aug 24 (Reuters) - Canada's dollar jumped against the U.S. currency on Wednesday after better-than-expected U.S. data offered hope that the U.S. economy was not heading for another recession.
The Canadian currency held relatively steady in the overnight session on a mixed bag of news. Equity markets seesawed, and the German Ifo survey showed German business morale posting its steepest drop since the aftermath of the Lehman Brothers collapse in late 2008. Meanwhile, Moody's downgraded Japan's sovereign debt rating.
But the U.S. July durable goods orders supported demand for riskier assets, and it pushed up the Canadian dollar, which hit a session high and secondary technical U.S. dollar support at C$0.9840 to the U.S. dollar, or $1.0163.
"It's reversed the tone," said Jack Spitz, managing director of foreign exchange at National Bank Financial.
U.S. durables goods orders rose twice as much as expected on strong demand for aircraft and motor vehicles, but a gauge of business spending fell. The data also topped economists estimates after excluding the volatile transportation sector. [ID:nCAT005498]
It was a welcome change from a spate of weak sentiment surveys recently.
At 9:32 a.m. (1432 GMT), the currency CAD=D4 was at C$0.9869 to the U.S. dollar, or $1.0133, up from C$0.9880 to the U.S. dollar, or $1.0121, at Tuesday's close.
"Still the market is compressing the range in dollar/Canada with the ultimate breakout being a function of what happens on Friday," said Spitz, referring to the key market event this week when global central bankers, economists, and academics gather in Jackson Hole, Wyoming.
Investors are waiting to see if the U.S. Federal Reserve announces further economic stimulus a year after Chairman Ben Bernanke launched a second round of quantitative easing to revive the struggling U.S. economy.
Government bonds were mostly flat to higher and outperformed their U.S. counterparts following the U.S. data.
The two-year bond CA2YT=RR was unchanged to yield 0.950 percent, while the 10-year bond CA10YT=RR edged up 18 Canadian cents to yield 2.369 percent. The 30-year bond was the only issue on the curve that fell. (Editing by Padraic Cassidy)
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