CANADA FX DEBT-C$ weakens modestly, hovering around key level
* Canadian dollar at C$1.1028 or 90.68 U.S. cents * Bond prices mostly higher across the maturity curve (Adds details, quotes, updates prices) By Leah Schnurr TORONTO, April 22 (Reuters) - The Canadian dollar weakened modestly against the greenback on Tuesday as traders found few compelling reasons to drive the loonie in a significant direction, even as data showed domestic wholesale trade rose more than expected in February. Strength in recent Canadian economic data had helped the loonie recover from the 4-1/2-year low it hit in March, but that rally has run out of steam in the last couple of weeks, leaving the currency moving sideways as it hovers around the technically important C$1.10 level. Tuesday's data was similarly unable to give the Canadian dollar a lift. Canadian wholesale trade rose 1.1 percent in February, surpassing expectations for 0.7 percent, as sales rose in all subsectors. After firming slightly earlier in the day, the loonie eventually gave up its gains. "We have had this string of better-than-expected data, but on the other side, we also have a central bank who is quite neutral in its tone, and we also have the U.S. outperforming Canada," said Camilla Sutton, chief currency strategist at Scotiabank in Toronto. "The end result is that I think Canada is stuck on either side of C$1.10, waiting for a catalyst that would have the central bank shift its tone, have the growth outlook improve even more, or have a shift in global growth." The Bank of Canada said last week that an interest rate cut was still a possibility, even as the central bank forecast inflation will pick up speed this year. The Canadian dollar ended the North American session at C$1.1028 to the greenback, or 90.68 U.S. cents, slightly weaker than Monday's close of C$1.1015, or 90.79 U.S. cents. Despite some large swings in the currency this year, the loonie has essentially traded sideways from where it was at the end of January, said Greg Moore, senior currency strategist at Royal Bank of Canada in Toronto. "I think for the time being, there aren't any clear signals that we'll be moving out of that very broad sideways range," said Moore. "A lot of the Canadian dollar bearish story and developments have been priced in at this point and we need to see something new before we start to see a stronger directional trend." Canadian government bond prices were mostly higher across the maturity curve, with the two-year up half a Canadian cent to yield 1.070 percent and the benchmark 10-year up 2 Canadian cents to yield 2.448 percent. (Editing by Chris Reese)
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