CANADA FX DEBT-C$ ticks higher as US$ falls, oil steady

Wed Sep 29, 2010 8:25am EDT
 
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 * C$ inches higher 97.35 U.S. cents
 * Bonds follow U.S. Treasuries lower
 By Jennifer Kwan
 TORONTO, Sept 29 (Reuters) - Canada's dollar ticked higher
against its U.S. counterpart on Wednesday, supported by a
generally weaker greenback and steady oil prices, but was
largely trapped in a tight trading range.
 At 8:10 a.m. (1210 GMT), the Canadian dollar CAD=D3 was
at C$1.0272 to the U.S. dollar, or 97.35 U.S. cents, up
slightly from Tuesday's finish at C$1.0302 to the U.S. dollar,
or 97.07 U.S. cents.
 Supporting the Canadian currency was a weaker U.S. dollar
as investors prepared for the Federal Reserve to print more
money to lift the weakening U.S. economy, while oil prices were
also slightly firmer. [FRX/] [O/R]
 More broadly, market watchers say the underlying theme
pervading markets is uncertainty about the strength of the
global recovery in 2011.
 Key areas of focus recently include any future quantitative
easing by the U.S. Federal Reserve, even in a modest form, as
well as concerns about euro zone banks and some countries'
debts. [ID:nFEDAHEAD] [MKTS/GLOB]
 "The market is looking at, on the one hand, the situation
in the U.S. and the Fed weighing its policy options. On the
other hand, the situation in Europe is still not that appealing
for investors," said Shaun Osborne, chief currency strategist
at TD Securities.
 "The stresses and strains are still quite evident in the
euro zone," he added.
 Osborne said the currency was stuck in a range of C$1.02 to
the U.S. dollar and C$1.03.
 Canadian bond prices fell along with U.S. Treasuries, which
were softer ahead of an auction of 7-year notes but speculation
of a fresh round of quantitative easing by the Federal Reserve
helped limit losses. [US/]
 The two-year bond CA2YT=RR was down 2 Canadian cents to
yield 1.401 percent, while the 10-year bond CA10YT=RR slipped
10 Canadian cents to yield 2.753 percent.
 (Reporting by Jennifer Kwan; Editing by Theodore d'Afflisio)