CANADA FX DEBT-C$ hits five-week high as market eyes Fed, data
* C$ at C$1.0260 vs US$ or 97.47 U.S. cents * Fed policy debate in focus * U.S. jobs and North American GDP data due this week * Bond prices mixed By Solarina Ho TORONTO, July 29 (Reuters) - The Canadian dollar strengthened to a five-week high against the U.S. dollar on Monday as investors positioned themselves ahead of a batch of key North American economic data and a U.S. Federal Reserve meeting this week. As well as the Fed, the European Central Bank and the Bank of England are due to make statements this week. All are expected to repeat or refine "forward guidance" that will say that borrowing costs will remain extraordinarily low as long as economic growth stays sub-par and inflation poses no threat. "The CAD is outperforming, really ... it's doing fairly well in an environment of fairly mixed, but somewhat stronger U.S. dollar. A lot of the event risks come later in the week," said Camilla Sutton, chief currency strategist at Scotiabank. The Fed will be most closely scrutinized, having signaled plans to begin phasing out its money-printing stimulus program this year. Most economists are eyeing a September start but markets have scaled back views of any aggressive changes. "Everyone is waiting for the Fed, the FOMC (Federal Open Market Committee) meeting on Wednesday, which should dictate the next month or so of trading," said John Curran, senior vice president at CanadianForex. The Canadian dollar, which was outperforming nearly all of its key currency counterparts, closed at C$1.0260 versus the U.S. dollar, or 97.47 U.S. cents. That was a bit firmer than Friday's North American session close of C$1.0273 versus the U.S. dollar, or 97.34 U.S. cents. The Canadian dollar hit an intraday high of C$1.0253, its strongest level since June 19. Curran said he expects the currency to trade in a tight range until Wednesday. "The Canadian dollar seems to be getting back to middle-of-the-road levels for recent months. I would look for anything toward the C$1.02 area to be well supported for the U.S. dollar - people wanting to sell Canadian dollars there," Curran said. "On the top side, it would have to break above C$1.035 to get interesting," he added. Canada and the United States, its largest export market, will release economic growth data this week, while the United States also will issue July jobs data. Prices for Canadian government debt were mixed. The two-year bond fell 3.5 Canadian cent to yield 1.166 percent, while the benchmark 10-year bond fell 38 Canadian cents to yield 2.497 percent.
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