* C$ ends at 95.90 U.S. cents
* Currency neared C$1.05 before turning higher
* Bond prices slip after two-days of big gains (Updates to close)
By Ka Yan Ng
OTTAWA, Aug 12 (Reuters) - The Canadian dollar ended its two-day slide against the U.S. currency on Thursday, reclaiming some of the ground it had lost because of growing doubts about the outlook for the global economy.
The currency approached the key level of C$1.05 to the U.S. dollar, but when it did not break through this mark it gained a little momentum higher with no major Canadian economic releases scheduled for the day.
The Canadian dollar CAD=D4 finished at C$1.0428 to the U.S. dollar, or 95.90 U.S. cents, up moderately from Wednesday's finish at C$1.0453 to the U.S. dollar, or 95.67 U.S. cents.
"Overall the Canadian dollar is outperforming today," said Tyson Wright, senior foreign exchange trader at Custom House, a currency services firm in British Columbia.
"It's consolidated right under that C$1.05 mark. I think the relative economics are coming into play right now."
Wright said the U.S. economy was a concern and, because the United States is by far Canada's biggest trading partner, the Canadian dollar could come under pressure in the medium term.
The currency slid as low as C$1.0494 to the U.S. dollar, or 95.29 U.S. cents. Wright noted "a lot" of resistance around the C$1.0475-C$1.05 area, but said the currency remains in the broad range of C$1.01-C$1.0750, where it has been for months.
"We're right in the middle of that. That seems pretty appropriate as a tug of war between the risk and the economic fundamentals. On balance, that should keep us contained in this range," he said.
The currency had slumped for two straight sessions, hitting a three-week low, as fears mounted about the global recovery and the struggling U.S. economy in particular. A spate of weak data from China added to worries about slowing global growth.
"There are a number of influences that are somewhat conflicted in terms of where to push the Canadian dollar in terms of its breakout. A week ago, it was below C$1.02 and now it's looking at potentially trading above C$1.05," said Jack Spitz, managing director of foreign exchange at National Bank Financial.
Piercing C$1.05, he added, could send the currency as weak as C$1.0587 to the U.S. dollar, or 94.46 U.S. cents, a level last seen on July 20.
Canadian bond prices were weaker across the curve on profit-taking, following big gains made over the last several days on the back of the dimming world economic outlook.
Fresh signs of a weak U.S. labor market were seen in the weekly claims data, lending early support to bonds. That built on two days of gains made after the U.S. Federal Reserve downgraded its assessment of the economy and said it would take measures to help the U.S. recovery from stalling more. [ID:nN1274714]
But as equity markets cut losses, the prices for less risky government debt market moved into negative territory.
"The bond market rallied fairly decently early on when we got the jobless claims figures and it's sort of been crawling back as the day's progressed," said Mark Chandler, head of Canadian fixed income and currency strategy at RBC Capital Markets.
"Overall, yields are still relatively low and still facing the hangover from the FOMC."
The two-year bond CA2YT=RR dipped 4 Canadian cents to yield 1.359 percent, while the 10-year bond CA10YT=RR lost 32 Canadian cents to yield 3.007 percent. Canadian bonds mostly outperformed their U.S. counterparts across the curve.
In offering news, the city of Toronto sold C$200 million of debt in a reopening of an existing issue, according to a term sheet seen by Reuters. [ID:nN12114591]
U.S. CPI data and retail sales, both for July, will be the next key figures to be scrutinized by market players. The numbers are due on Friday at 8:30 a.m. (1230 GMT). (Reporting by Ka Yan Ng in Ottawa and Claire Sibonney in Toronto; editing by Rob Wilson)