November 30, 2011 / 2:44 PM / 9 years ago

CANADA FX DEBT-C$ hits 2-week high after GDP data, cenbank moves

 * C$ hits more than 2-week high after GDP data
 * Canadian economy grows 3.5 pct annualized in Q3
 * Global central banks announce liquidity moves
 * Bond prices slip across curve in risk-on bid
 (Updates with details, comments)
 By Claire Sibonney
 TORONTO, Nov 30 (Reuters) -  The Canadian dollar hit its
strongest level in more than two weeks against the U.S. dollar
on Wednesday after stronger-than-expected domestic growth data
and coordinated action by major central banks to provide
liquidity to the global financial system.
 The currency CAD=D4 touched a session high of C$1.0124
against the U.S. dollar, or 98.78 U.S. cents, its firmest level
since Nov. 14.
 Data showed the Canadian economy grew at an annualized rate
of 3.5 percent in the third quarter, recovering from a
tsunami-linked 0.5 percent contraction in the second quarter.
 A Reuters survey of analysts had forecast a rise of 3.0
percent. By contrast, third quarter real gross domestic product
(GDP) in the United States grew 2.0 percent.
 "On a relative basis that stacks up very well globally. All
in all it's CAD positive," said Camilla Sutton, chief currency
strategist at Scotia Capital.
 "It takes some burden off the Bank of Canada, but the Bank
of Canada has warned us again and again that the real risk is
global developments and that's front and center today."
 Canada's primary dealers don't expect the central bank to
resume raising interest rates until late next year or 2013, and
traders pared back bets of future interest rate cuts following
the GDP data. BOCWATCH
 At 9:32 a.m. (1432 GMT), the Canadian dollar stood at
C$1.0153 against the U.S. dollar, 98.49 U.S. cents, up from
Tuesday's North American session close of C$1.0303 to the U.S.
dollar, or 97.06 U.S. cents.
 The currency was already on stronger footing heading into
the GDP report, after global central banks announced a
coordinated move to keep funds flowing through financial
markets that are being rocked by Europe's escalating debt
crisis. [MKTS/GLOB]
 Canadian government bond prices retreated across the curve,
tracking U.S. Treasuries lower amid dissolved safe-haven
appetite. [US/]
 The two-year bond CA2YT=RR fell 17 Canadian cents to
yield 0.920 percent, while the 10-year bond CA10YT=RR dropped
40 Canadian cents to yield 2.170 percent.
 (With additional reporting by Jennifer Kwan; Editing by
Jeffrey Hodgson)

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