CANADA FX DEBT-C$ steadies after hitting six-month low

Wed Oct 1, 2014 10:02am EDT
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* Canadian dollar at C$1.1199 or 89.29 U.S. cents
    * Bond prices higher across the maturity curve

    By Leah Schnurr
    TORONTO, Oct 1 (Reuters) - The Canadian dollar was little
changed against the greenback on Wednesday, steadying after it
hit a more than six-month low overnight as investors watched to
see whether it will take a run at its low for the year, near
    The loonie came into the first trading day of the fourth
quarter sporting a loss of 4.7 percent over the span of the last
three months, making for its worst quarter in three years.
    While the Canadian dollar has had a number of factors
working against it, the main driver of its fall continues to be
the rally in the greenback as the U.S. economy picks up and the
U.S. Federal Reserve moves closer to raising interest rates.
    Having breached resistance at C$1.12 on Tuesday, analysts
say focus is turning to whether the loonie will revisit 2014's
low of C$1.1279, set in March.
    "Everyone is looking for that as a level that will either
provide some resistance or a level that once we're through,
really opens up another leg higher" for the U.S. dollar against
the loonie, said Camilla Sutton, chief currency strategist at
Scotiabank in Toronto.
    The Canadian dollar was at C$1.1199 to the
greenback, or 89.29 U.S. cents, nearly flat with Tuesday's close
of C$1.12, or 89.29 U.S. cents. It hit a session low of C$1.1223
in overnight trade, its lowest level since late March.
    The market has little in the way of domestic factors to
trade off, with the economic calendar light until Friday's trade
balance data for August. The U.S. unemployment report, which is
also due Friday, also will be closely watched.
    While a strong jobs report would support the U.S. dollar
continuing to move higher, a disappointing report would make it
difficult for traders to look past two weak labor reports in a
row, Sutton said.
    The previous U.S. jobs report had showed employers hired the
fewest number of workers in eight months in August. Canada will
not release its September jobs report until the following
    Canadian government bond prices were higher across the
maturity curve, with the two-year up 1-1/2 Canadian
cents to yield 1.116 percent and the benchmark 10-year
 up 31 Canadian cents to yield 2.110 percent.

 (Editing by Peter Galloway)