CANADA FX DEBT-C$ crawls higher in subdued trade, bonds up

* C$ tips higher to 98.78 U.S. cents

* Mild price gains across the government bond curve

TORONTO, Dec 20 (BestGrowthStock) – The Canadian dollar was little
changed against the U.S. currency on Monday, eyeing a
relatively narrow range while drawing mild support from firmer
commodity prices.

After sliding for two straight sessions last week, the
Canadian dollar began a data-filled week relatively flat.

It crept to a session high at C$1.0103 to the U.S. dollar
in early trade, bouncing from C$1.0141 to the U.S. dollar, as
North American stock index futures indicated a higher open and
the price of oil pushed up.

Trading, however, was expected to be subdued as year-end
holidays approach.

At 8 a.m. (1300 GMT), the Canadian dollar (CAD=D4: ) was at
C$1.0124 to the U.S. dollar, or 98.78 U.S. cents, up slightly
from C$1.0128 to the U.S. dollar, or 98.74 U.S. cents, at
Friday’s close.

“The C$1.0140-50 level represents the topside resistance
technically. It’s been unsuccessfully tested on a number of
occasions, so that represents the near-term target for (U.S.)
dollar bulls,” said Jack Spitz, managing director of foreign
exchange at National Bank Financial. He put support at
C$1.0090 to the U.S. dollar, and further out at C$1.0040 to the
U.S. dollar.

Domestic data may take the market’s focus away from global
influences, such as persistent debt unease in Europe and
heightened Korean tensions.

That has helped push up prices mildly in Canadian
government bonds, which were higher across the curve in light
safe-haven flows.

The two-year bond (CA2YT=RR: ) rose 4 Canadian cents to yield
1.626 percent, while the 10-year bond (CA10YT=RR: ) climbed 5
Canadian cents to yield 3.179 percent.

The Canadian consumer price index report for November on
Tuesday will likely be the highlight of the week, although
October figures for wholesale trade, retail sales, and gross
domestic product may also sway the currency.

Inflation has been lower than expected for much of the
year, so markets are looking for reassurance the trend won’t
suddenly be reversed. Such a reassurance would leave the
central bank in a comfortable position to hold its key interest
rate unchanged at 1 percent for at least the first quarter of
2011. For details, see [ID:nN17250600] (ECONCA: )
(Reporting by Ka Yan Ng; editing by Jeffrey Benkoe)

CANADA FX DEBT-C$ crawls higher in subdued trade, bonds up