CANADA FX DEBT-C$ hits three-month high on U.S. data

* C$ hits high at C$0.9887 to the $US, or $1.0114
    * C$ hits record high against euro
    * Bond prices mostly lower

    By Solarina Ho
    TORONTO, Aug 15 (Reuters) - The Canadian dollar hit its
highest level against its U.S. counterpart in more than three
months on Wednesday after U.S. economic data supported the
possibility of further stimulus by the Federal Reserve.
    U.S. consumer prices were unchanged in July for a second
straight month, giving the Fed room to deal with uncomfortably
high unemployment through monetary easing. 
    The Canadian currency also advanced against many of its
peers and rose to a record high against the euro, which
weakened against the U.S. dollar. 
    "We are seeing continued outperformance of North American
currencies," said Audrey Childe-Freeman, head of foreign
exchange strategy for BMO Capital Markets in London. 
    The Canadian dollar hit C$0.9887 versus the U.S.
dollar, or $1.0114, up from Tuesday's close at C$0.9919, or
$1.0082. The currency had hit C$0.9862, or $1.014 back on May 4.
    "I think people ... are surprised by the consistent strength
of the Canadian dollar," said David Bradley, director of foreign
exchange trading at Scotiabank, who also noted an interest to
sell USD/CAD around the London fix.
    A recent slew of supportive economic data, global stimulus
hopes and comments by the Bank of Canada have combined to power
the Canadian dollar toward May highs.
    "It seems like Canada's going to continue to do better,"
said Bradley.
    The Canadian dollar was also notably stronger versus other
risk currencies, touching a one-month high against the
Australian dollar.
    The Australian dollar was hurt after Moody's
ratings agency said it might eventually downgrade the credit
ratings of some Australian states. 
    "I like to play the bullish Canadian dollar view on the
crosses and in particular against the Aussie dollar," said
    Canadian bond prices were mostly lower. The two-year bond
 slid 11 Canadian cents to yield 1.243 percent, and
the benchmark 10-year bond fell 65 Canadian cents to
yield 1.929 percent.