CANADA FX DEBT-C$ firms after strong data, Putin comments
* Canadian dollar at C$1.1042 or 90.56 U.S. cents * Bond prices higher across the maturity curve By Leah Schnurr TORONTO, March 18 (Reuters) - The Canadian dollar firmed against the greenback on Tuesday on data that showed a stronger-than-expected recovery in factory sales in January and on comments by Russian President Vladimir Putin that helped calm fears about the Ukraine crisis. Putin signed a treaty on Tuesday making Crimea part of Russia, defying Western sanctions, but said he did not plan to seize any other regions of Ukraine. The move came after a disputed referendum in Crimea over the weekend that showed voters in favor of being reunited with Russia. Moscow took control of Crimea late last month following the ouster of Ukraine's president. "There were a lot of question marks in the air about how Putin would respond to the sanctions against individuals in Russia and Ukraine, and what the annexation of Crimea meant as far as Russia's next steps," said Scott Smith, senior market analyst at Cambridge Mercantile Group in Calgary. "Because markets didn't see (Putin's comments) as a great escalation from the sanctions already imposed on Russia in terms of blow-back from Russia, we got a boost in risk appetite." At home, figures showed factory sales climbed 1.5 percent in January, the fastest pace in nearly a year and well above the market forecast of a 0.6 percent gain, making up for the revised 1.5 percent downturn in December. The loonie briefly touched a session high immediately following the release of the data. The Canadian dollar was at C$1.1042 to the greenback, or 90.56 U.S. cents, stronger than Monday's close of C$1.1053, or 90.47 U.S. cents. Market focus on Tuesday was on a speech and press conference by Bank of Canada Governor Stephen Poloz later in the day. Monetary policy has been a major driver of the Canadian dollar in recent months after the central bank shifted gears last year by dropping any mention of interest rate hikes on the horizon. "I think the markets are fairly well positioned for what he could potentially say," Smith said. "I would assume we're going to get something very much in line with what we saw with the last Bank of Canada rate statement." At its most recent policy announcement in early March, the Bank of Canada continued to express concerns about weak inflation and repeated its next move on interest rates could be in either direction. Canadian government bond prices were higher across the maturity curve, with the two-year up half a Canadian cent to yield 1.025 percent and the benchmark 10-year up 9 Canadian cents to yield 2.422 percent.
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