CANADA FX DEBT-C$ pulls back from near 3-month high
* Canadian dollar at C$1.0917 or 91.59 U.S. cents * Bond prices higher across the maturity curve By Leah Schnurr TORONTO, April 10 (Reuters) - The Canadian dollar weakened against the greenback on Thursday, pulling back from a nearly three-month high in the previous session as investors consolidated positions after the currency's recent string of gains. U.S. data that showed first time claims for jobless benefits fell more than expected last week undercut the loonie as the greenback trimmed losses that had been spurred by disappointment over the contents of the minutes of the U.S. Federal Reserve's March policy meeting. Minutes from the March Fed meeting released on Wednesday suggested interest rate hikes may not come as soon as some had thought, and that helped to lift the loonie through key technical levels. But the currency had retraced much of that gain by Thursday morning. "Yesterday there was a lot of talk that we breached technical support in the low C$1.09s," said Mazen Issa, senior Canada macro strategist at TD Securities in Toronto. "Once that move was well advanced, we saw some consolidation and we're seeing U.S. dollar-Canadian dollar come back up again." The Canadian dollar was at C$1.0917 to the greenback, or 91.59 U.S. cents, weaker than Wednesday's close of C$1.0872, or 91.98 U.S. cents. The loonie, which came under intense selling pressure earlier in the year, has climbed about 3 percent since hitting a 4-1/2 year low in mid-March. Some signs of strength in the domestic economy have boosted sentiment, prompting investors to cover short positions. Issa said that shift in sentiment is not likely to last. "That longer-term trend that we're expecting to unfold with higher U.S. dollar-Canadian dollar is likely becoming re-entrenched," he said. "It may not be as swift as we have seen it in the past. I think ultimately we're still waiting for a major macro catalyst to propel it upwards." With little on the domestic economic calendar in the coming days, investors are turning their attention to the Bank of Canada's policy-setting meeting next Wednesday. The central bank's more dovish tone has hit the loonie hard in the last few months and markets will be watching to see if its stance changes. Canadian government bond prices were higher across the maturity curve, with the two-year up 1-1/2 Canadian cents to yield 1.062 percent, and the benchmark 10-year up 10 Canadian cents to yield 2.455 percent. (Editing by Peter Galloway)
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