* C$ rises to 99.63 U.S. cents
* Bonds follow U.S. Treasuries lower
* CIBC sees C$ slipping from parity next year
TORONTO, Nov 10 (Reuters) - Canada's dollar firmed against the U.S. currency helped by a recovery in commodity prices on Wednesday, but remained unable to sustain parity.
At 7:50 a.m. (1250 GMT), the Canadian dollarwas at C$1.0037 to the U.S. dollar, or 99.63 U.S. cents, up from C$1.0074 to the U.S. dollar, or 99.27 U.S. cents, at Tuesday's close.
It neared parity with the U.S. currency, reaching as high as C$1.0008 to the U.S. dollar, or 99.92 U.S. cents, but bounced as choppy trading ensued with a raft of data, including trade data for September from Canada and the U.S., to come later in the session.
A market holiday in the U.S. on Thursday may also lighten trade.
"Canada is again a flow follower. It's not breaking resistance above C$1.01. Overnight price action has been more or less a reversal of price action seen yesterday afternoon," said Jack Spitz, managing director of foreign exchange at National Bank Financial.
Market players are also monitoring developments ahead of the Group of 20 leaders' summit on Thursday and Friday in Seoul, and simmering tensions over economic policy between Beijing and Washington have been front and center.
Few investors expect any significant agreement on currencies or trade imbalances to emerge from the meet. A G20 official told Reuters the communique would call for "flexible exchange rate movement", and would not provide neither numerical targets nor details on external imbalances. [ID:nASN000037]
"Choppy price action is indicative of some squaring (ahead of the G20) but again, currencies like Canada that would benefit from higher commodities and better fundamentals and economics are likely to outperform. That's what we're seeing in the Canadian dollar this morning," said Spitz.
The price of oil climbed toward $87 a barrel earlier, helping the Canadian dollar recover from a session low at C$1.0092 to the U.S. dollar, or 99.09 U.S. cents.
Canada's currency will likely hover around parity with the U.S. dollar in the near term, but could weaken in early 2011 as markets realize the U.S. Federal Reserve is not "flooding the world with greenbacks," according to CIBC World Markets. [ID:nN09115367]
Canadian government bond prices were lower across the curve, following the same path as U.S. Treasuries as investors awaited the auction of $16 billion of 30-year bonds later on Wednesday.
The two-year bonddipped 4 Canadian cents to yield 1.630 percent, while the 10-year bond fell 30 Canadian cents to yield 3.001 percent. (Reporting by Ka Yan Ng; Editing by Theodore d'Afflisio)
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