CANADA FX DEBT-Canada dollar edges upward after BoC financial risk report
* Canadian dollar at C$1.0855, or 92.12 U.S. cents * Strengthens after Bank of Canada risk report, eases on inflation comments * Bond prices rise across maturity curve (Updates to close) By Andrea Hopkins TORONTO, June 12 (Reuters) - The Canadian dollar firmed slightly against the U.S. dollar on Thursday after the Bank of Canada said risks to financial stability were largely unchanged, but the currency gave back some gains after Governor Stephen Poloz said inflation pressures remained low. In its semiannual report on financial stability, the central bank said Canada's financial system is robust despite lingering concern about a stretched housing market and low inflation, while external risks from China have increased. But the bank's governor expressed persisting anxiety over low inflation and retained a dovish tone on monetary policy, preventing the Canadian dollar from gaining more than a few ticks. "The currency did strengthen a little bit around the time of the report, but really he didn't say anything new at all, just that risks were unchanged in aggregate," said Mark Chandler, head of Canadian fixed-income and currency strategy at Royal Bank of Canada. "(During) the press conference, where he started talking more about monetary policy, you actually saw a bit of unwind in strength in the Canadian dollar as he underlined that inflation risks were still quite low." The Canadian dollar ended the North American session at C$1.0855 against the greenback, or 92.12 U.S. cents, slightly stronger than Wednesday's close at C$1.0867 per greenback, or 92.02 U.S. cents. The U.S. dollar slipped for a second straight session against a basket of major currencies after U.S. retail sales data missed expectations and weekly jobless claims rose, curbing speculation of a hawkish stance from the Federal Reserve. Chandler said the Canadian dollar was likely to remain in a fairly tight range until next week, when all eyes will be on the Fed's two-day policy-setting meeting. The Fed's Open Market Committee will release its policy statement and forecasts, and hold a news conference, on Wednesday. Canadian government bond prices were higher across the maturity curve, with the two-year edging up to yield 1.078 percent and the benchmark 10-year bond rising 33 Canadian cents to yield 2.311 percent. (Reporting by Andrea Hopkins; editing by G Crosse and Tom Brown)
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