CANADA FX DEBT-C$ steadies but still on track for worst month since Jan
* Canadian dollar at C$1.1153 or 89.66 U.S. cents * Bond prices higher across the maturity curve (Adds details, quotes, updates prices) By Leah Schnurr TORONTO, Sept 29 (Reuters) - The Canadian dollar was little changed against the greenback on Monday, stabilizing after hitting a six-month low overnight, though optimism over the U.S. economy was expected to keep the loonie on the ropes in the near-term. The Canadian currency lost 1.7 percent last week, breaking through the C$1.11 level as it was hurt by ongoing broad U.S. dollar strength and the growing view that the Bank of Canada will stay on the sidelines longer than the Federal Reserve. The loonie had extended those losses in early trading but managed to recover with investors finding few fresh incentives to push the currency lower, said Scott Smith, senior market analyst at Cambridge Mercantile Group in Calgary. "We're really corralled after last week's fairly poor performance in the loonie," Smith said. There was no Canadian economic data on Monday, but the calendar will pick up with July gross domestic product on Tuesday, and trade balance data later in the week. Investors will also be watching the U.S. jobs report due on Friday. The Canadian dollar ended the North American session at C$1.1153 to the greenback, or 89.66 U.S. cents, a hair stronger than Friday's close of C$1.1155, or 89.65 U.S. cents. The loonie hit a session low of C$1.1178 in overnight trading, its lowest level since late March. After the U.S. dollar-Canadian dollar spent much of August comfortable around the C$1.09 area, the run-up in the currency pairing through September has taken it into relatively uncharted territory, said Rahim Madhavji, president at KnightsbridgeFX.com in Toronto. With one trading day left in September, the loonie is down 2.5 percent for the month, putting it on track for its worst month since January when it was caught in a steep selloff. "As long as the U.S. economic data continues to be quite positive, the U.S. dollar will continue to grind higher," said Madhavji. "Then six months down the line, we might see things start to reverse because what's good for the U.S. is good for Canada, just a bit in the future," he added. Encana Corp's bid to buy the United States' Athlon Energy for $5.93 billion in cash could imply a large negative flow for the Canadian dollar leading into mid-December, when the deal is expected to close, Camilla Sutton, chief currency strategist at Scotiabank, wrote in a note. Canadian government bond prices were up across the maturity curve, with the two-year up 3 Canadian cents to yield 1.119 percent and the benchmark 10-year up 33 Canadian cents to yield 2.128 percent. (editing by Gunna Dickson)
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