CANADA FX DEBT-C$ drops to lowest in more than a week after China data
* Canadian dollar at C$1.1009 or 90.83 U.S. cents * Bond prices mostly higher across the maturity curve By Leah Schnurr TORONTO, April 15 (Reuters) - The Canadian dollar weakened to its lowest level against the greenback in more than a week on Tuesday, hit by concern over China's economic prospects and by investor caution ahead of the Bank of Canada's latest policy statement on Wednesday. With market focus on China, domestic economic data on Tuesday failed to move the currency off session lows. Figures showed Canadian manufacturing sales rose more than expected in February, though January's figures were revised down. In China, data showed the country's money supply grew at the weakest pace in more than a decade in March, suggesting faltering economic momentum in the world's second-largest economy. "Everyone has been focused more recently on the risk of deceleration going into the new year," said David Tulk, chief Canada macro strategist at TD Securities in Toronto. "We've seen that in some of the manufacturing data in China and this is just an extension of that, especially as it's relevant for the generation of credit and it seems that that is the driving force of a lot of Chinese growth." "The risks that do exist around that slowing down are certainly a cause for concern and I think that's setting the tone a bit more generally," Tulk said. The loonie is often sensitive to economic developments in China, which is a major consumer of natural resources. The Canadian dollar was at C$1.1009 to the greenback, or 90.83 U.S. cents, weaker than Monday's close of C$1.0953, or 91.30 U.S. cents. The main event of the week will be the Bank of Canada's policy decision due on Wednesday. While the central bank is expected to hold rates steady at 1 percent, analysts will scrutinize the statement and quarterly economic projections for insight into the direction of monetary policy. The bank shifted gears last year when it struck a more dovish tone, which has weighed on the loonie in recent months. The Canadian dollar has regained more than 2 percent since hitting a 4-1/2 year low last month. That advance could leave the currency vulnerable to a pullback even if the central bank isn't overly dovish, analysts say. Canadian government bond prices were mostly higher across the maturity curve, though the two-year was unchanged to yield 1.052 percent. The benchmark 10-year was up 6 Canadian cents to yield 2.406 percent. (Editing by Peter Galloway)
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