* C$1.0308 vs US$, or $0.9701
* C$ likely to take direction from U.S. equities
* Global fears remain as policymakers talk
TORONTO, Sept 23 (Reuters) - The Canadian dollar started
the session weaker against its U.S. counterpart on Friday, near
11-month lows, as risk sentiment remained fragile on fears of
renewed recession even as some markets recovered.
European shares edged up from 26-month lows on Friday and
the euro rose after the G20 major economies pledged to preserve
financial stability, but risk sentiment remained fragile on
fears of renewed recession in the developed world.
U.S. stock index futures pointed to a tentative recovery on
Wall Street after finance ministers and central bankers from
the Group of 20 said they would take "all steps necessary" to
calm the global financial system and said central banks were
ready to provide liquidity. [MKTS/GLOB]
Traders said the Canadian dollar was victim to the larger
story of U.S. dollar strength, and would take its direction
from U.S. equities.
"This is not a Canadian story here, so we're going to be
held accountable like everybody else is to the direction that
equities give us," said C.J. Gavsie, managing director of
foreign exchange sales at BMO Capital Markets.
The Canadian dollar
stood at C$1.0308 to the U.S.
dollar in early trade, or 97.01 U.S. cents, below Thursday's
North American session close at C$1.0274 to the U.S. dollar, or
97.33 U.S. cents.
It sank as low as C$1.0350 overnight, off Thursday's
While Canada's economy has generally been a bright spot
amid global woes, helping to buoy the currency, it cannot
continue to outperform if its largest trading partner, the
United States, continues to slump.
Gavsie said the Canadian dollar would likely find some
resistance near the overnight strength of C$1.0226 to the U.S.
dollar. On the weak side, the currency was meeting support at
about C$1.0345 to the U.S. dollar, but Gavsie said there was
really no way of gauging how far the Canadian dollar could sink
if world markets started going the wrong way.
"There is a multi-week high from September to October in
the C$1.0375-80 area. And then it's unfortunately wide open up
until the top, up to C$1.0513," he said.
"We're going to have to wait to see how this one plays
Bond prices were mixed. The two-year Canadian government
was up 1 Canadian cent to yield 0.831 percent,
while the 10-year bond climbed 3 Canadian cents to
yield 2.021 percent.
(Editing by Theodore d'Afflisio)