CANADA FX DEBT-C$ rises on euro zone rescue hopes
*C$ rises to $1.0315 vs US$, or 96.95 U.S. cents
*Bonds prices rise across the curve
By Claire Sibonney
TORONTO, Sept 29 (Reuters) - The Canadian dollar crept up slightly against the U.S. dollar on Thursday as investors clung to some hope that European leaders could begin to organize an effective response to the euro zone debt crisis.
The German parliament backed more powers for the euro zone rescue fund with a large majority in what was Chancellor Angela Merkel's biggest test since she took power six years ago. [ID:nB4E7KG01S]
The reaction in global equity and commodity markets was mixed, highlighting continued uncertainty over whether Greece could avoid a debt default.
"Essentially the market is just trying to cling to risk-on but having trouble," said Camilla Sutton, chief currency strategist at Scotia Capital.
"As every vote for the EFSF 2 gets passed that's one more hurdle cleared, but I think generally the market recognizes that it's not just the passing of the EFSF 2 that's the solution; we probably need a bigger, broader solution than that."
At 8:05 a.m. (1205 GMT), the Canadian dollar CAD=D4 stood at C$1.0315 versus the U.S. dollar, or 96.95 U.S. cents, up from Wednesday's North American session close of C$1.0326 agains the greenback, or 96.84 U.S. cents.
Sutton said the day's range for the currency should hold between C$1.0270-C$1.0358.
Amid the slew of upcoming North American data releases are a final read on second quarter U.S. GDP, initial jobless claims, home sales, manufacturing surveys and Canadian producer and raw materials prices.
Bond prices were higher across the curve. The two-year Canadian government bond CA2YT=RR was up 4 Canadian cents to yield 0.909 percent, while the 10-year bond CA10YT=RR added 7 Canadian cents to yield 2.188 percent.
(Reporting by Claire Sibonney, Editing by Chizu Nomiyama )
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