CANADA FX DEBT-C$ weakens in choppy trade after Fed rate forecasts
* Canadian dollar at C$1.1004 or 90.88 U.S. cents * Bond prices lower across the maturity curve (Adds Fed details, quotes, updates prices) By Leah Schnurr TORONTO, Sept 17 (Reuters) - The Canadian dollar weakened against the greenback on Wednesday, reversing in the face of a broad surge in the U.S. dollar as the Federal Reserve hinted at a quicker pace for raising interest rates even as it stuck to its accommodative policy language. The Fed's policy statement had been one of the most anticipated events of the week and speculation over what the Fed would signal for its timing on rate hikes had caused sharp gyrations in both directions for the loonie in recent sessions. While the U.S. central bank repeated that rates will stay low for a "considerable time" after its bond-buying program ends, it issued projections that suggested officials saw rates potentially rising faster once they start to raise them than they had previously forecast in June. The market also latched on to the Fed's new blueprint for how it plans to exit the extraordinary monetary stimulus it put in place in response to the global financial crisis. "They like the fact that there's an exit policy, and that is important," said Amo Sahota, director at Klarity FX in San Francisco. "I think given the construct of what else is happening globally and where Europe is, it's a prudent thing to do to leave the language still the same, that 'considerable' period of time." The Canadian dollar ended the North American session at C$1.1004 to the greenback, or 90.88 U.S. cents, weaker than Tuesday's close of C$1.0970, or 91.16 U.S. cents. While there has been a lot of volatility for the loonie in the last week stemming from shifting speculation around the Fed, analysts expect that when all is said and done, the Canadian dollar is in for further weakness by the end of the year. With a number of potentially market-moving events still to come, including Scotland's referendum on independence from the United Kingdom and Canadian inflation data, the currency will likely remain choppy through the rest of the week, said Greg Moore, senior currency strategist at Royal Bank of Canada in Toronto. "We do expect the stronger U.S. dollar-Canadian dollar trend to reassert itself a little bit more clearly in the fourth quarter, as some of the bigger driving themes start to unfold," particularly the divergence between the Fed and the Bank of Canada, said Moore, who expects to see the loonie at C$1.15 by the end of the year. Canadian government bond prices were lower across the maturity curve, with the two-year off 3 Canadian cents to yield 1.165 percent and the benchmark 10-year down 18 Canadian cents to yield 2.263 percent. (Editing by James Dalgleish)
© Thomson Reuters 2017 All rights reserved.