FOREX

The Bank of Canada is likely to play it safe when it outlines its policy stance this week, holding the line on interest rates and tinkering at the margins of its economic forecasts as it waits for firmer evidence that the recovery is for real.

European shares bounced back on Monday to hover near last week's 12-month highs, with banks, food producers and drugmakers leading the advance ahead of more earnings results from major companies such as Apple (AAPL.O).

News, details on bond issues in the European markets on Monday:

After rallying to an intraday high above 0.9250 in Asia on Friday risk appetite waned somewhat sending the Aussie dollar back below 92 cents in offshore trade.

Venezuelan President Hugo Chavez said on Saturday that countries including Venezuela, Russia and Iran had proposed the U.S. dollar should be replaced as the currency used for the oil trade.

The U.S. budget deficit hit a record $1.4 trillion in the just-ended fiscal year, the government said on Friday, as the deep recession and a series of bank rescues cut a gaping hole in public finances. The tally was $162 billion smaller than the White House had forecast in August, but it still amounted to 10 percent of total U.S. economic output, the most for any budget shortfall since World War Two.

China will be able to sustain the momentum of its current V-shaped recovery, setting the stage for stronger growth next year than in 2009, Yao Jingyuan, chief economist of the National Bureau of Statistics, said on Saturday.

The dollar recovered some of the week's losses on Friday, as news of a large quarterly loss at Bank of America and flagging consumer confidence dulled investor demand for higher-yielding, higher-risk currencies.

Canada's dollar fell versus theU.S. currency early on Friday after domestic inflation data didnot alter expectations that the Bank of Canada can keep itspledge to leave interest rates steady through mid-2010.

Wall Street was set to drop at the open on Friday after disappointing quarterly results from Dow components General Electric Co (GE.N) and Bank of America Corp (BAC.N) dragged stock futures lower.

First Horizon National Corp (FHN.N), the largest bank in Tennessee, reported a narrower-than-expected quarterly loss, helped by a 46 percent decrease in provision for bad loans.

The largest U.S. mortgage insurer MGIC Investment Corp (MTG.N) said it may not be able to repay amounts owed under its notes due in 2011, and posted a worse-than-expected third-quarter loss due to an increase in delinquencies.

Britain's top share index was lower at midday on Friday, led by banks after quarterly earnings numbers from Bank of America Corp (BAC.N) and General Electric (GE.N) disappointed.

European equities slipped from one-year highs on Friday as General Electric (GE.N) and Bank of America (BAC.N) results disappointed and hurt momentum that was built after IBM (IBM.N) and Google (GOOG.O) earnings figures.

Canadian consumer prices fell in September from a year earlier due largely to tumbling gasoline prices and while there was other evidence of emerging inflation pressures, it was not expected to be of concern to the Bank of Canada.

Wall Street was set to drop at the open on Friday after disappointing quarterly results from Dow components General Electric Co (GE.N) and Bank of America Corp (BAC.N) dragged stock futures lower.

French IT services provider Atos Origin (ATOS.PA) confirmed on Friday it was in the race to buy Italian electronic payment company SIA-SSB, but said it still could not provide investors with estimates for 2010 results.

News, details on bond issues in the European markets on Friday:

German Chancellor Angela Merkel's conservatives and the Free Democrats (FDP) are trying to bridge differences on a range of policy issues before finalising their coalition pact by the end of next week.

European shares turned negative on Friday after earnings results from Bank of America (BAC.N) disappointed investors.

Intraday support at 0.9030 held firm in local exchange yesterday with strong Chinese Trade data giving the Aussie another boost towards 91 cents.

A gauge of manufacturing in New York State jumped unexpectedly this month to its highest in five years on surging new orders, shipments and employment in the sector, the New York Federal Reserve said in a report on Thursday.

Citigroup Inc (C.N) posted a quarterly loss to shareholders as it suffered $8 billion of credit losses, raising further questions about the future of the bank that is one-third owned by the U.S. government.

U.S. Treasuries prices trimmed losses as U.S. stock index futures turned lower after Goldman Sachs Group (GS.N) reported its third-quarter results.

Spanish infrastructure firm Abertis (ABE.MC) is eyeing projects in China and India to boost growth beyond its stronghold in southern Europe, but is not in a hurry for any deals, its chairman said on Thursday.

A decision on whether the Swedish government will give loan guarantees to troubled auto maker Saab is still a couple of months away, the country's enterprise minister told Reuters on Thursday.

Capital One Financial Corp's (COF.N) U.S. credit-card defaults rose in September as more Americans lost their jobs, in another sign that consumers remain under stress.

European shares hit a fresh one-year high on Thursday, with analysts pointing to third-quarter earnings beating forecasts, though mobile phone giant Nokia (NOK1V.HE) bucked the trend. At 1041 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was up 0.5 percent at 1,021.65 points, having risen as far as 1,022.26, the highest since Oct. 7, 2008.

Britain's top share index was 0.1 percent lower by mid-session Thursday, weighed on by weaker commodity stocks as metal prices fell, ahead of results from U.S. banks Citigroup (C.N) and Goldman Sachs (GS.N)