3 Min Read
* C$ at C$1.0289 against U.S. dollar * Canadian retail sales rose 0.6 percent in July * Bond prices mostly higher across the curve By Leah Schnurr TORONTO, Sept 24 (Reuters) - The Canadian dollar was weaker against its U.S. counterpart on Tuesday, erasing brief gains following domestic retail sales data as market uncertainty weighed over the direction of Federal Reserve economic stimulus plans. The loonie hit a session high after data showed Canadian retail sales rose 0.6 percent in line with economists' expectations in July, but the currency quickly cut gains. The improvement in sales reversed a drop the month before. After last week's market-surprising decision from the Federal Reserve to hold the pace of its bond-buying program steady, investors have sought insight from comments from several Fed policymakers over the last few days. Influential New York Fed President William Dudley was the latest on Tuesday morning, saying he wouldn't rule out a reduction in bond-buying from the central bank later this year. The Fed is currently buying $85 billion in bonds a month to keep borrowing costs low and prop up the economic recovery. The Canadian dollar touched a three-month high in the wake of the Fed's decision to stand pat, but has since pulled back from that. "We had a pretty sharp adjustment post-Fed," said Mark Chandler, head of Canadian fixed income and currency strategy at Royal Bank of Canada. "I think people will get comfortable with the idea that they linked this to a change in their forecasts. I don't think expectations will be built up as much for the October meeting for the Fed." A busy schedule of Fed speakers throughout the week is likely to hold the market's attention. The Canadian dollar was at C$1.0289 to the U.S. dollar, or 97.19 U.S. cents, weaker than Monday's session close of C$1.0285, or 97.23 U.S. cents. Prices for Canadian government bonds were mostly higher across the maturity curve, though the two-year bond was unchanged to yield 1.211 percent. The benchmark 10-year bond rose 23 Canadian cents to yield 2.621 percent.