* Canadian dollar at C$1.3398, or 74.64 U.S. cents
* Bond prices fall across the maturity curve
By Solarina Ho
TORONTO, Sept 30 (Reuters) - The Canadian dollar rebounded
against the greenback on Wednesday, bolstered by data showing
faster-than-expected economic growth in Canada, but it failed to
sustain its session-high gains as overall sentiment remained
weary.
The economy grew 0.3 percent in July, more than the 0.2
percent economists had been forecasting, in the second straight
month of expansion after a dismal first five months of the year.
"I think it's pretty encouraging that the Canadian economy
has bounced back," said BMO Capital Markets senior economist
Benjamin Reitzes. He noted, however, that a rebound in oil
prices that drove a large part of the July increase was probably
unsustainable.
At 9:26 a.m. EDT (1326 GMT), the Canadian dollar
was trading at C$1.3398 to the U.S. dollar, or 74.64 U.S. cents,
stronger than the Bank of Canada's official close of C$1.3418,
or 74.53 U.S. cents.
It rallied to a session high immediately after the data but
quickly pared gains.
"The view on Canada's just so negative right now, it's
probably going to be tough for the Canadian dollar to gain
meaningful traction," Reitzes said.
"Opportunity to sell - I think that's the way people are
looking at it right now. Until that mindset changes, it's going
to be tough for Canada."
The loonie, which had softened to an 11-year intraday low of
C$1.3457 in the previous session, was trading between C$1.3385
and C$1.3431 so far on Wednesday.
Investor attention will shift toward U.S. employment data
for September, due at 8:30 a.m. EDT on Friday. Economists are
forecasting 203,000 new jobs.
A report by payrolls processor ADP showed U.S. private
employers added 200,000 jobs this month, beating economists'
expectations and reinforcing the possibility that the Federal
Reserve could raise interest rates before the end of the year.
Canadian government bond prices fell across the maturity
curve, with the two-year CA2YT=RR down 3 Canadian cents to
yield 0.523 percent and the benchmark 10-year CA10YT=RR
falling 28 Canadian cents to yield 1.463 percent.
The Canada-U.S. two-year bond spread narrowed to -13.4 basis
points, while the 10-year spread narrowed to -61.8 basis points.