CANADA FX DEBT-C$ lower as greenback gains; commodities weigh
* C$ ends at 97.44 U.S. cents
* Bond prices mixed across curve
* G20 finance and central bankers weekend meeting in focus (Updates to close, adds quote)
By Jennifer Kwan
TORONTO, Oct 21 (Reuters) - The Canadian dollar ended lower against a rebounding U.S. currency on Thursday, reversing earlier gains, as the appetite for risk faded on stock markets and commodity prices fell.
The U.S. dollar rebounded in volatile trade after the euro failed again to hold above $1.40 and as investors turned cautious before a G20 finance ministers meeting this weekend. [FRX/]
Investor focus was on the Friday and Saturday meetings of Group of 20 finance and central bank chiefs in South Korea. They are expected to try to reach agreement on a common path to manage currency, trade and macroeconomic imbalances.
"The volatility speaks to the friction that exists in the marketplace," said Jack Spitz, managing director of foreign exchange at National Bank Financial.
"That friction is not limited to traders but also held by central bankers themselves. As they meet this weekend to discuss the potential for currency accord, the market itself is still undecided as to whether any success is going to be achieved.
"That uncertainty is playing out with respect to the volatility being seen in the currencies."
The Canadian dollar CAD=D4 finished at C$1.0263 to the U.S. dollar, or 97.44 U.S. cents, well off its earlier high at 98.36 U.S. cents, and below Wednesday's finish at C$1.0222 to the U.S. dollar, or 97.83 U.S. cents.
Earlier, the currency had a firmer tone against its U.S. counterpart as world stocks and U.S. equity futures ticked higher and the U.S. dollar came under broad selling pressure.
But Toronto's main stock index was lower at midafternoon, as were U.S. stock indexes, which managed to eke out gains at the close.
As well, the price of oil, often a driver of the Canadian dollar, was off 2 percent to settle around $80 a barrel, dragged lower by the stronger greenback, while gold and base metal prices also sank. [O/R] [GOL/] [MET/L]
Canadian bond prices were mixed across the curve, with lower prices at the short end and higher prices at the long end, said Sheldon Dong, fixed income analyst at TD Waterhouse Private Investment.
Typically, such a flattening pattern would suggest investors think that the longer-term bonds are inexpensive relative to the shorter-term issues, said Dong, but adding he wouldn't read too much in the day's action.
"I think the markets are just gyrating. It's just market noise more than anything. Yesterday, Canada pretty much unperformed the U.S. because of all the new primary issuance. I think today is a correction of that activity," he said.
The two-year bond CA2YT=RR was down 4 Canadian cents to yield 1.396 percent, while the 30-year bond CA30YT=RR gained 25 Canadian cents to yield 3.454 percent. (Additional reporting by Ka Yan Ng; editing by Rob Wilson)
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