CANADA FX DEBT-C$ nears 3-week high; Bank of Canada, Fed in view
* Canadian dollar at C$1.1129 or 89.86 U.S. cents * Bond prices mostly weaker By Andrea Hopkins TORONTO, Oct 29 (Reuters) - The Canadian dollar strengthened to its highest against the greenback in nearly three weeks on Wednesday as rising oil prices continued to bolster the currency, while the market awaited news later in the day from the U.S. Federal Reserve and the Bank of Canada. World stock markets rose and major government bond yields were little changed as markets anticipated a soothing message from the Fed when it ends its two-day policy meeting. Analysts expected the Fed to signal that it will not raise interest rates for some time. Traders in Canada were awaiting testimony by Bank of Canada Governor Stephen Poloz at the Senate banking committee. The appearance had been scheduled for last week but was canceled due to a gunman's attack on Parliament Hill. Brent crude oil rose above $87 a barrel as traders bet the Fed would keep U.S. interest rates low. That lifted the Canadian currency, but Jeremy Stretch, head of foreign exchange strategy at CIBC World Markets in London, said the loonie's show of strength may be short-lived. "For me, down at these levels of C$1.1135 to C$1.1145, there is a bit of value in buying down there, assuming that we're going to continue to see the Bank of Canada providing a relatively dovish bias as far as Mr. Poloz when he appears in Ottawa later, and assuming that the market is somewhat overly complacent as regards inertia from the Fed," Stretch said. At 9:24 a.m. EDT (1324 GMT) the Canadian dollar was at a session high of C$1.1129, or 89.86 U.S. cents, stronger than Tuesday's North American session close of C$1.1171, or 89.52 U.S. cents. That was its strongest point since Oct. 9. Stretch said he expects these levels to be the high point of the day, with C$1.1210 as the opposite end of the trading range for the session. While the Fed is expected to announce the end of its bond-purchase program at the conclusion of its two-day meeting, it will likely reinforce its willingness to wait before raising interest rates. Poloz begins his testimony at 4:15 p.m. EDT (2015 GMT). The central bank has kept its main policy rate at 1 percent since September 2010. Canadian government bond prices were mostly weaker, with the two-year down half a Canadian cent to yield 1.015 percent. The benchmark 10-year was down 12 Canadian cents to yield 2.043 percent. (Reporting by Andrea Hopkins; Editing by Peter Galloway)
© Thomson Reuters 2017 All rights reserved.