CANADA FX DEBT-C$ strengthens half a cent to two-week high vs US$
* C$ at C$1.0116 vs US$, or 98.85 U.S. cents * U.S. crude, gold prices rise * U.S. data backs expectation Fed bond buying to continue * Canada monthly GDP data released on Tuesday By Solarina Ho TORONTO, April 29 (Reuters) - The Canadian dollar touched its strongest level against the U.S. dollar in two weeks on Monday as the greenback weakened broadly against most other currencies following U.S. data that added to expectations the Federal Reserve will maintain its current pace of stimulative bond buying. Higher commodity prices also added to the positive tone for the Canadian currency. The weaker U.S. dollar helped push both gold and U.S. crude prices up, with oil extending gains by more than $1 per barrel. "It doesn't feel like (U.S. dollar) parity is imminent, despite this move," said Don Mikolich, executive director, foreign exchange sales at CIBC World Markets. "I think it's just some fatigue on the top and a risk rally, and Canada's benefited. I think further gains will be harder to come by." The Canadian dollar finished the session at C$1.0116 against the greenback, or 98.85 U.S. cents. This was stronger than Friday's North American session finish of C$1.0169, or 98.34 U.S. cents. The currency touched its strongest level since April 12, when it traded as firm as C$1.0094. U.S. data showed consumer spending rose unexpectedly last month as benign inflation helped household spending power. The price index for consumer spending dipped 0.1 percent. The lack of inflation pressure gives the U.S. central bank scope to maintain its very easy monetary policy stance. "It's really just broad-based U.S. dollar weakness. We're seeing almost every currency has gained ground against the U.S. dollar leading into the North American open," said Camilla Sutton, chief currency strategist at Scotiabank. "Some of that has to do with shifting expectations for how long the Fed will continue its pace of bond buying." Canada's dollar extended gains made on Friday after U.S. figures showed economic growth sped up in the first quarter, but not as much as expected. The Canadian dollar ended the day mostly stronger against other currencies after broadly underperforming earlier. Canada's February GDP figures on Tuesday will be the next economic data in focus. Markets are also waiting for the announcement of who will be picked to be the next governor of the Bank of Canada. The price of Canadian government debt was mixed, with the two-year bond flat, yielding 0.934 percent, and the benchmark 10-year bond up 4 Canadian cents to yield 1.702 percent.
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