* C$ closes up at 93.54 U.S. cents, bonds mixed
* Retail sales figures disappoint
* Fed, G20 meetings in focus this week (Adds details, updates prices)
By Ka Yan Ng
TORONTO, Sept 22 (Reuters) - The Canadian dollar finished higher against the U.S. currency on Tuesday, supported by firm commodity prices, as investors looked past a disappointing read on consumer data.
The currency closed at C$1.0691 to the U.S. dollar, or 93.54 U.S. cents, up from Monday's close of C$1.0775 to the U.S. dollar, or 92.81 U.S. cents.
Apart from a blip brought on by retail sales, which unexpectedly fell in July from June [ID:nN22339158], the currency was hemmed into a fairly tight range in the North American session after reaching C$1.0661 to the U.S. dollar, or 93.80 U.S. cents overnight.
The currency's rise follows a mood of caution that characterized Monday's trading ahead of the U.S. Federal Reserve policy meeting and this week's Group of 20 summit.
"It's basically a mirror image to yesterday," said Brendan McGrath, senior trader at Custom House, a currency services firm in British Columbia.
"There was a fairly big retracement in dollar/Canada overnight. There has been very little in the way of price action. It's been kind of flat across the board," he said, noting the session was highlighted by "hand-sitting" ahead of the Fed.
Wednesday's focus will be on the final day of the U.S. central bank's two-day policy meeting. Market watchers will look for the Fed to hold interest rates steady but will also want to know if it will soon unwind some stimulus programs due to a pickup in economic data.
After the Fed, the spotlight turns to leaders from the Group of 20 nations, who will meet in Pittsburgh this week. Among major issues expected to be discussed will be bankers' pay and the need to examine strategies for withdrawing state economic stimulus measures. [ID:nLH78576]
Still, the Canadian currency maintained a strong tone as investors scooped up assets perceived to be riskier. Toronto and U.S. stocks gained on Tuesday, while key commodities such as oil and gold were also higher.
The Canadian dollar has often tracked stocks and resources as a reflection of risk appetite.
While the retail figures were disappointing, other July indicators, such as solid reports on wholesale trade and manufacturing, will likely keep the month's gross domestic product in growth territory as the economy shifts out of recession.
"The fact that the July GDP result is on track for a positive reading is a step in the right direction," said Charmaine Buskas, senior economics strategist, at TD Securities.
BONDS MIXED
Canadian bond prices were mixed ahead of the Fed decision.
The two-year bond
Late on Tuesday afternoon, the Bank of Canada said that it will allow two temporary liquidity facilities to expire at the end of October. The announcement was taken in stride by market players because the move was seen as a reflection of the improvement in market conditions as the global financial crisis has eased. [ID:nN22363926]
"The markets have already priced in the huge improvement in funding and liquidity conditions, so for the bank to formally announce that there's less of a need for those initiatives is really putting an exclamation point on those improvements," said Derek Holt, an economist at Scotia Capital. (Reporting by Ka Yan Ng; editing by Rob Wilson)