CANADA FX DEBT-C$ remains locked in range, bonds tilt higher
* C$ rises to $1.0136
* Bonds flat to higher after UK inflation report
TORONTO, Feb 16 (Reuters) - Canada's dollar was slightly firmer but still hemmed in its recent range against the U.S. dollar on Wednesday as equities and the price of oil tipped higher.
So far this week, the Canadian dollar has found little reason to deviate from a range between C$0.9848-C$0.9904. More broadly, it's been snugly trading in a C$0.9832-C$1.0060 this year, even as riskier assets such as oil and U.S. stock prices have generally been on the rise.
"Tactically we remain bullish Canada, both against the U.S. dollar and on the crosses," said Jack Spitz, managing director of foreign exchange at National Bank Financial.
"With the market effectively refusing to break Canada out of this falling trend channel that's been in place since the middle of October, the market will take it through near-support at C$0.9850."
The 2011 high so far at C$0.9832 is also a key level, followed by C$0.9780, which represents the bottom end of the channel, he said.
Spitz, however, said if the price of U.S. oil slips below $82.40, it could set the stage to sell the commodity-linked Canadian dollar.
The market has been hard pressed to find alternative catalysts, and has been sitting relatively well-supported as market players hold to expectations that the Bank of Canada will likely boost interest rates in the first half of the year. [CA/POLL]
Friday's Canadian inflation data for January could help firm up expectations on the timing of the Bank of Canada's next rate hike after stepping to the sidelines late last year after three successive rate increases.
Three pieces of data from Statistics Canada on Wednesday -- the leading indicator for January, capital flows for December, as well as manufacturing sales for December -- failed to provide the spark to push the currency out of its recent range ECONCA.
At 8:13 a.m. (1313 GMT), the Canadian dollar was at C$0.9866 to the U.S. dollar, or $1.0136, up slightly from Tuesday's North American session close at C$0.9897 to the U.S. dollar, or $1.0104.
Canadian bond prices were flat to higher, following the cue from U.S. Treasuries, which rallied in response to a dovish Bank of England speech.
Bank of England Governor Mervyn King was less hawkish than anticipated in his quarterly inflation report. [US/][ID:nLDE71F154]
The two-year Canadian government bond CA2YT=RR wasup 2 Canadian cents to yield 1.915 percent, while the 10-year bond CA10YT=RR edged up 13 Canadian cents to yield 3.462 percent.
(Reporting by Ka Yan Ng, Editing by Chizu Nomiyama)
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