CANADA FX DEBT-C$ hits session high after Bank of Canada, ECB

* C$ strengthens to C$0.9837, or $1.0165
    * Bank of Canada repeats hawkish tone on interest rates
    * ECB says ready to buy bonds

    By Alastair Sharp
    TORONTO, Oct 4 (Reuters) - The Canadian dollar hit a session
high versus its U.S. counterpart on Thursday as the Bank of
Canada said it is still looking to raise interest rates and as
traders switched focus from the faltering global recovery to the
timing of a European bond buyback.
    At 9:32 a.m. (1332 GMT) the Canadian dollar was at
C$0.9837 to the U.S. dollar, or $1.0165, up from C$0.9881, or
C$1.0120 on Wednesday.
    The currency had slipped to a four-week low on Wednesday,
but recovered some of those losses later in the day as the price
of oil rose. 
    The Bank of Canada is still looking at the possibility of
raising interest rates, Deputy Governor Tiff Macklem said on
Thursday, in comments that contrasted with the easing stance of
the U.S. Federal Reserve. Macklem also said, however, that there
is some slack in the labor market that has not been taken up by
the recovering economy. 
    "I would suggest the outlook for global growth has
deteriorated and continues to do so, however for most investors
it's a matter of deciding whether it's the global growth outlook
or monetary policy that matters," said Camilla Sutton, chief
currency strategist at Scotiabank.  
    "For us, it's Fed action, particularly Fed action versus the
Bank of Canada's stance."
     But some investors brushed off any possibility that
Canada's central bank could raise interest rates at a time when
many of the world's other major economies are moving in the
opposite direction.
    "There is not a snowball's chance in Hades that they can
raise rates anytime soon," said John Curran, senior vice
president at CanadianForex.
    He said a broader downswing in the price of oil would likely
weigh on the Canadian currency, which often follows the lead of
crude prices given the country's role as an oil and gas
    European Central Bank President Mario Draghi said the ECB
was primed to buy troubled euro zone bonds when conditions are
right and that this stance has already calmed financial market
    Later on Thursday, the U.S. Federal Reserve will release the
minutes of the meeting that approved its third round of
aggressive stimulus measures last month.    
    Canadian government bond prices were lower, with the
two-year bond slipping 4 Canadian cents to yield
1.084 percent, while the benchmark 10-year bond CA10YT=RR fell
by 24 Canadian cents, to yield 1.734 percent.