CANADA FX DEBT-C$ slightly weaker after Fed forecast
* C$ at C$0.9912 vs US$, or $1.0088 * More bullish Fed outlook boosts greenback * C$ hits year high vs Australian dollar * Bond prices lower across curve By Jon Cook TORONTO, March 14 (Reuters) - The Canadian dollar slid against the U.S. currency on Wednesday as Tuesday's comments from the U.S. Federal Reserve on the economy and banking sector continued to boost the greenback above its global competitors. Canada's role as America's largest trading partner helped it outperform other commodities-linked currencies such as the Australian and New Zealand dollars. "The Canadian dollar is materially outperforming both the Aussie and the Kiwi, which is what you typically see on days when you get this pure (U.S.) dollar strength," said Adam Cole, global head of foreign exchange strategy for Royal Bank of Canada. The Canadian dollar hit its strongest level against the Australian currency this year, at one point firming to C$1.0353 to the Australian dollar. It hit a two-month peak against New Zealand's dollar. A report on Tuesday showed U.S. retail sales posted their largest gain in five months in February, the latest data to suggest the economic recovery is on a more solid footing. . Acknowledging this trend, the Fed slightly upgraded its outlook, expecting "moderate" growth over coming quarters and a gradual decline in the unemployment rate, although it said the jobless rate remained elevated. "The market seems to have read the (Fed) meeting as (U.S.) dollar bullish and it's just carried on rallying," said Cole. At 8:43 a.m. (1243 GMT), the Canadian dollar stood at C$0.9912 versus the U.S. dollar, or $1.0088, down from Tuesday's North American session close at C$0.9892 versus the U.S. dollar, or $1.0109. The Fed also said most of the largest U.S. banks passed their annual stress test in a report that underscored the recovery of the financial sector but called out a few laggards, including Citigroup Inc. Cole said with no significant data until Friday's Canadian manufacturing and U.S. industrial output numbers, the Canadian dollar would hover within a range between a high at C$0.9842 and a trough at just above parity with the U.S. dollar. Canada's bond prices were lower across the curve, with the two-year bond down 4 Canadian cents to yield 1.228 percent, while the 10-year bond fell 40 Canadian cents to yield 2.114 percent.
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