By Solarina Ho
TORONTO, Sept 3 (Reuters) - The commodities-linked Canadian
dollar was stronger against its U.S. counterpart on Tuesday,
underpinned in part by slightly firmer oil prices and positive
Chinese data, while key drivers for the week are still to come.
Prices for crude, a key Canadian export, nudged higher after
an Israeli missile test caused jitters among investors already
anxious about the conflict in Syria. The test underscored
concerns about supply disruption in the Middle East.
The currency was also feeling the after-effects of upbeat
Chinese data over the weekend, which showed factory activity
expanded at the fastest pace in more than a year last month,
raising hopes that the economic slowdown in the world's
second-largest economy may be stabilizing.
"Some of the flow is still being driven by, for instance,
the positive Chinese PMI over Sunday night," said Greg Moore, FX
Strategist at TD Securities.
"There's quite a bit more to come this week, so ... we're
still sort of in a bit of a range until some of the more
important developments become more and more clear."
The Canadian dollar was trading at C$1.0513 versus
the U.S. dollar, or 95.12 U.S. cents at 9:22 a.m. (1322 GMT).
This was firmer than Monday's close at C$1.0542, or 94.86 U.S.
cents and also firmer than the Bank of Canada's last official
close on Friday of C$1.0530, or 94.97 U.S. cents.
North American markets were closed on Monday for the Labor
Day holiday.
The currency, which was outperforming all major counterparts
except for the Australian dollar, was expected to
stay between C$1.0480 and C$1.570 in the near term, said Moore.
The Bank of Canada's September rate decision will be the
most important event of the week, though economists are not
expecting any surprises.
"Not really any change in language. There hasn't been much
cause for any adjustments of the language over the past month or
two," said Moore.
North American jobs data on Friday and the general risk
sentiment, determined by developments in Syria, will be the
other two key drivers for the market.
Prices for Canadian government debt were mostly lower, with
the two-year bond off 3 Canadian cents 1.210 percent,
and the benchmark 10-year bond down 31 Canadian
cents to yield 2.658 percent.