RPT-CANADA FX DEBT-C$ rises,bonds fall;CPI spurs rate hike talk

Tue Apr 19, 2011 8:13am EDT
 
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* Canada March inflation soars above target range

* Odds for rate rises from July onward gain

* C$ firms to one week high at $1.0443

* Bonds slide across the curve

By Ka Yan Ng

TORONTO, April 19 (Reuters) - The Canadian dollar firmed to a one-week high on Tuesday after data showed Canada's annual inflation rate in March jumped to its highest level since September 2008, ratcheting up pressure on the Bank of Canada to resume raising interest rates soon.

On a year over year basis, the inflation rate in March shot up to 3.3 percent from 2.2 percent in February, well above market expectations, and above the Bank of Canada's target range. The core rate remained tame, but was still higher than market forecasts. [ID:nN19160402]

"It was strong across the board, even the seasonally-adjusted numbers made significant month-over-month gains," said Camilla Sutton, chief currency strategist, at Scotia Capital.   Continued...