Jan. 28 (Bloomberg) -- Canadian bonds rose for a third day after the U.S., Canada's largest trading partner, said December durable goods orders were unexpectedly unchanged. The currency pared earlier losses.

Orders for U.S. durable goods held at $181.4 billion after falling 2.3 percent in November, the Commerce Department said in Washington. Economists surveyed by Bloomberg News had forecast a 2 percent rise. The Bank of Canada cut its target interest rate last week to spur growth, as a surging currency hurt Canadian exports, which represent about 40 percent of annual output.

Bonds reversed earlier losses after the report. The benchmark two-year bond, which is most sensitive to interest-rate policy, rose 2 cents to C$100.91, as its yield fell 1 basis point to 2.51 percent. Its yield reached 2.49 percent yesterday, the lowest since Bloomberg started tracking it in June 1989. A basis point is 0.01 percentage point.

The Canadian dollar fell to 76 U.S. cents at 8:39 a.m. in Toronto from 76.61 U.S. cents yesterday. A U.S. dollar buys $1.3157.

Last Updated: January 28, 2004 08:45 EST