CANADA FX DEBT-C$ falls to 5-month low as finally breaks C$1.10
* Canadian dollar at C$1.1047 or 90.52 U.S. cents * Bond prices higher across the maturity curve (Adds details, quotes, updates prices) By Leah Schnurr TORONTO, Sept 11 (Reuters) - The Canadian dollar shed 1 percent against the greenback on Thursday, gaining momentum as it cracked the C$1.10 barrier on its third attempt this week to break through the closely watched resistance level. The loonie had earlier been dragged lower by a drop in oil prices, but the currency continued to fall to a five-month low even as oil reversed course to push higher. Markets this week have been focused on trying to gauge when the U.S. Federal Reserve might start to raise interest rates, and investors expect the loonie will continue to take its cues from the U.S. dollar half of the currency pair. The pair pushed through C$1.10 in each of the past two sessions but had failed to close above it until Thursday. The level had acted as resistance on several occasions in recent months. "It seems like it's a broad day for U.S. dollar buying and we might have successfully pierced that C$1.10 psychological resistance level that's held in place over the last couple of months," said David Tulk, chief Canada macro strategist at TD Securities in Toronto. "We now seem to be in a potentially new range," Tulk said. The Canadian dollar ended the North American session at C$1.1047 to the greenback, or 90.52 U.S. cents, weaker than Wednesday's close of C$1.0935, or 91.45 U.S. cents. The loonie touched a session low of C$1.1059, its weakest since the beginning of April. It has shed about 1.5 percent so far this week, putting it on track for its worst week since early January when the currency was caught in a heavy selloff. Heading into next week's Fed meeting, speculation has increased that a rate hike could come sooner than markets have been anticipating, which would benefit the greenback to the detriment of the loonie. "There's a growing consensus that (the Fed) might alter the forward guidance to remove the 'considerable time' phrasing around when they're going to start tightening after they're done tapering," said Bipan Rai, director of foreign exchange strategy at CIBC World Markets in Toronto. The central bank has said it expects there to be a "considerable time" before it raises rates following the end of its bond-buying program, which is expected in October. Data that showed new home prices in Canada were unchanged in July had earlier elicited little reaction from the loonie, though the mostly second-tier domestic data on offer this week had not been expected to drive the currency significantly. Canadian government bond prices were higher across the maturity curve, with the two-year up 1-1/2 Canadian cents to yield 1.146 percent and the benchmark 10-year up 10 Canadian cents to yield 2.195 percent. (Editing by Meredith Mazzilli)
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