CANADA FX DEBT-C$ weighed down by soft equities, outlook
* C$ ends at 97.25 U.S. cents
* Bond prices track moves in U.S. market (Updates to close, adds quotes)
By Jennifer Kwan
TORONTO, Sept 27 (Reuters) - The Canadian dollar ended lower against the U.S. currency on Monday, weighed down by weaker commodity and equity prices, while broader worries about the pace of U.S. economic recovery kept investors on edge.
U.S. crude oil futures recovered from early losses to end marginally higher, but were weighed down for most of the day by broader concerns over global demand and the economy. [O/R]
Gold was largely steady but shied away from the record high at $1,300 an ounce it reached earlier in the session. [GOL/]
Flat to lower U.S. equity markets, typically a barometer of risk appetite, provided no positive guidance for investors with U.S. stocks down on Monday following four weeks of gains. [.N] Toronto's resource heavy index also ended lower. [.TO]
More generally, the Canadian currency was pressured by underlying concerns about U.S. economic growth, said Camilla Sutton, chief currency strategist, Scotia Capital.
"Canada is stuck here, muddling around not doing a lot of anything ... Canada is a getting a pullback because it's so closely tied to the U.S.," said Sutton.
"As fears have escalated over the U.S. economic profile, and the market is well aware how closely tied CAD is to the U.S., it aggravates concerns that Canada could be slowing as well. That's hurting the currency."
The Canadian dollar CAD=D3 finished at C$1.0283 to the U.S. dollar, or 97.25 U.S. cents, down from Friday's finish at C$1.0256 to the U.S. dollar, or 97.50 U.S. cents.
Sutton said another reason why the Canadian currency may be floundering is "we've seen a huge rebuild in speculative CAD positions" recently.
"That rebuilding could have been part of why we saw some rally," she said. "Now that they've been rebuilt, it hints that there's not a lot in markets that is new that is pushing market participants to go even further long Canada."
She said technical levels to watch for this week include support at C$1.01 to the U.S. dollar and resistance at C$1.03.
With no economic data to speak of, Canadian bond prices were slightly higher across the curve, tracking gains by U.S. Treasuries, said Kam Bath, fixed income strategist at RBC Capital Markets.
U.S. debt prices rose as renewed worries about the finances of some smaller European countries fueled a safe-haven bid and strong demand for government debt. [US/]
The two-year bond was up 10 Canadian cents to yield 1.416 percent, while the 10-year bond rose 65 Canadian cents to yield 2.791 percent.
Canadian bonds mostly outperformed against U.S. Treasuries across the curve, with the exception of the long end. (Reporting by Jennifer Kwan; editing by Rob Wilson)
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