CANADA FX DEBT-C$ strengthens to nearly 10-month high against greenback

Thu Apr 28, 2016 9:59am EDT
 
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* Canadian dollar at C$1.2573, or 79.54 U.S. cents
    * Bond prices lower across the maturity curve

    TORONTO, April 28 (Reuters) - The Canadian dollar
strengthened to a nearly 10-month high against its U.S.
counterpart on Thursday after unexpected monetary-policy
inaction from the Bank of Japan and weaker-than-expected U.S.
economic growth weighed on the greenback.
    The U.S. dollar weakened against a basket of
currencies after a lack of fresh stimulus from the Bank of Japan
sent the yen soaring and world equity markets into the red. On
Wednesday, the U.S. Federal Reserve signaled it, too, was
hitting the policy pause button. 
    U.S. economic growth braked sharply to its slowest pace in
two years as consumer spending softened and a strong dollar
continued to undercut exports. 
    The loonie has rallied more than 16 percent from a 12-year
low in January of C$1.4689, helped by better-than-expected
domestic economic activity, fiscal stimulus and rebounding oil
prices.  
    Oil prices edged higher on Thursday, holding near their
strongest levels for 2016. U.S. crude prices were up 0.22
percent at $45.43 a barrel. 
    At 9:43 a.m. ET (1343 GMT), the Canadian dollar was
at C$1.2573 to the greenback, or 79.54 U.S. cents, stronger than
Wednesday's close of C$1.2619, or 79.25 U.S. cents.
    The currency's weakest level was C$1.2606, while it touched
its strongest since July 1 last year at C$1.2529.
    Canadian government bond prices were lower across the
maturity curve, with the two-year price down 1.5
Canadian cents to yield 0.687 percent and the benchmark 10-year
 falling 18 Canadian cents to yield 1.519 percent.
     The Canada-U.S. 10-year spread was 1.2 basis points less
negative at -34.8 basis points, its smallest gap since Jan. 20
last year, as Canadian government bonds underperformed.
    Canada's gross domestic product data for February is awaited
on Friday. It is expected to show economic growth declined by
0.2 percent in the month, pulling back from a strong start to
the year. 

 (Reporting by Fergal Smith; Editing by Bernadette Baum)