CANADA FX DEBT-C$ little changed, focus on Trichet, Bernanke

Thu Sep 8, 2011 9:42am EDT

* C$ little changed at C$0.9854 vs US$ or $1.0149

* Trichet, Bernanke overshadow U.S., Canada data

* Bond prices rise across curve (Updates, adds comments, details)

By Andrea Hopkins

TORONTO, Sept 8 (Reuters) - The Canadian dollar was little changed in early trade on Thursday as markets focused on statements by key central bankers, overshadowing U.S. and Canadian economic data.

The euro slid to a two-month low against the U.S. dollar after the European Central Bank kept interest rates on hold and ECB boss Jean-Claude Trichet said growth risks in the euro zone economy have shifted to the downside. [MKTS/GLOB]

The U.S. dollar could also come under pressure later in the day as U.S. Federal Reserve Governor Ben Bernanke speaks at 1:30 p.m. (1730 GMT), when he is expected to acknowledge disappointing news on economic recovery but will likely avoid announcing any further moves on monetary policy. [ID:nN1E7860OB]

The focus on the powerful central bankers overshadowed economic data in Canada and the United States, traders said.

"There are far bigger risks in the system, with Trichet speaking at the same time as the data release as well as Bernanke coming up this afternoon. That has clouded any impact from the data," said Camilla Sutton, chief currency strategist at Scotia capital.

"All in all, the Canadian dollar is likely to hug middle ground pretty closely."

At 9:26 a.m. (1326 GMT), the Canadian currency CAD=D4 wssd at C$0.9854 to the U.S. dollar, or $1.0149, essentially unchanged from Wednesday's North American close. It had strengthened briefly to C$0.9840 to the U.S. dollar, or $1.0162, immediately after U.S. and Canadian economic data was released.

U.S. jobless claims rose unexpectedly last week and Canadian trade and housing data for July came in mostly stronger than expected, according to reports released in Washington and Ottawa.

Canadian bond prices rose across the yield curve as investors shifted to safety.

The two-year bond CA2YT=RR was up 2.5 Canadian cents to yield 0.900 percent, while the 10-year bond CA10YT=RR rose 27 Canadian cents to yield 2.240 percent. (Editing by Peter Galloway)

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