CANADA FX DEBT-C$ stronger after hawkish central bank statement

* C$ at C$0.9896 versus US$, or $1.0105
    * Hawkish Bank of Canada aids strength
    * Central bank news conference, media briefing to set tone
    * Global concerns limit gains as US$ rises

    By Alastair Sharp
    TORONTO, Oct 24 (Reuters) - The Canadian dollar strengthened
against its U.S. counterpart on Wednesday, boosted by a hawkish
statement from the Bank of Canada on Tuesday that stands in
stark contrast to most other developed economies.
    The central bank was expected to set the currency's
direction for a second straight session, with Bank of Canada
Governor Mark Carney holding a news conference following the
release of its Monetary Policy Report later on Wednesday.
    Traders will study the report and Carney's comments for
clues on how the bank will balance its desire to eventually
withdraw stimulus and discourage excessive household debt with
global economic headwinds.
    "Anyone who expects the Bank of Canada to be raising rates
in the next six or twelve months is living in a fantasy land,"
said David Bradley, director of foreign exchange trading at
    The bank surprised markets on Tuesday by leaning towards
higher interest rates and issuing a fairly upbeat outlook on
growth, adding for the first time that soaring household debt
could justify eventual rate increases. 
    At 8:44 a.m. (1244 GMT) the Canadian dollar was
trading at C$0.9896 to the greenback, or $1.0105, compared with
C$0.9927, or $1.0074, at Tuesday's North American close.
    Gains were limited by a broader rise in the greenback
against most major currencies. Signs that Germany, Europe's
largest economy, may have entered a recession added to a gloomy
global picture that led to an appreciation in the safe haven
    The Canadian dollar was stronger against other major
currencies, including the euro, the Japanese yen and the Swiss
franc, but underperformed the Australian dollar, which was
helped by signs China is making a slow, steady recovery.
    Bradley said that further weakness in U.S. equity markets
and oil prices could limit movement in the Canadian dollar,
which he suggested would find it difficult to weaken though U.S.
dollar parity or gain beyond C$0.9880 in the near term.
    "I don't see it having a big move today," he said, adding
that a medium-term range could find resistance in the mid-97s.
    Canadian government debt prices slipped across the curve,
with the two-year bond off 5 Canadian cents to yield
1.166 percent, while the benchmark 10-year bond fell
24 Canadian cents to yield 1.878 percent.