CANADA FX DEBT-C$ at 2-week low after China growth prompts fears
* C$ back below parity, hits low of 99.93 U.S. cents
* Bonds weaker across the curve
* China GDP hits 9.8 percent in Q4
By Claire Sibonney
TORONTO, Jan 20 (Reuters) - The Canadian dollar fell back below parity against the greenback to its lowest in more than two weeks on Thursday, as riskier assets pulled back after stronger-than-expected Chinese growth data spurred fears of tighter monetary policy.
Chinese growth soared past forecasts to rise by 9.8 percent and inflation slowed less than expected in the fourth quarter, prompting a sell-off in global equities and commodities, such as oil, which hurt Canada's resource-linked currency. [MKTS/GLOB]
The Canadian dollar CAD=D4 hit a low of C$1.0007 against its U.S. counterpart, or 99.93 U.S. cents -- its softest level since Jan. 5.
The currency's sustained run above a one-for-one footing with the U.S. dollar was faltering for the third day after this week's dovish language by the Bank of Canada raised some doubts about the timing of the next interest rate hike. [ID:nN18138776]
"We've seen a significant move in the interest rate spreads between Canada and the U.S. and that combined with fears over Chinese tightening monetary policy and how that would impact growth and commodities is weighing on the Canadian dollar this morning," said Camilla Sutton, chief currency strategist at Scotia Capital.
"Reasonably, we're hovering either side of parity for the next little bit as we await the next catalyst to take Canada another leg stronger."
At 8:10 a.m. (1310 GMT), the currency stood at C$0.9996 to the U.S. dollar, or $1.0004, down from Wednesday's North American finish of C$0.9955 to the U.S. dollar, or $1.0045.
On the data front Thursday, investors will look to domestic wholesale sales figures, as well as U.S. jobless claims, existing home sales and leading indicators on both sides of the border.
Canadian government bond prices also fell across the curve. The two-year bond CA2YT=RR was down 2 Canadian cents to yield 1.704 percent, while the 10-year bond CA10YT=RR lost 13 Canadian cents to yield 3.254 percent.
(Reporting by Claire Sibonney)
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