CANADA FX DEBT-C$ firms as Bank of Canada maintains neutral tone
* Canadian dollar at C$1.1053 or 90.47 U.S. cents * Bank of Canada says still concerned about weak inflation * Bond prices mixed By Leah Schnurr TORONTO, March 5 (Reuters) - The Canadian dollar firmed against the greenback on Wednesday as analysts interpreted a policy statement from the Bank of Canada as maintaining the bank's neutral policy stance. The Bank of Canada held rates at 1 percent, and it continued to express concern about weak inflation and repeated that its next move on interest rates could be either up or down. After some choppy initial reaction, the Canadian dollar ultimately gained ground against the U.S. dollar as analysts said the central bank had not changed its tone significantly from its last statement in January. "At the end of the day, the bottom line is the same. Everything is data dependent, (and) on hold for the foreseeable horizon," said Don Mikolich, executive director of foreign exchange sales at CIBC World Markets in Toronto. "All told, not that much to move us out of our range. I think we're still stuck in this C$1.10 to mid-C$1.11s," Mikolich said. The currency is unlikely to have much reason to move out of that range until Friday's release of employment and trade data, he said. The Canadian dollar was at C$1.1053 to the greenback, or 90.47 U.S. cents, stronger than Tuesday's close of C$1.1100, or 90.09 U.S. cents. The Bank of Canada shifted to a more dovish policy stance last year and left the door open to a cut in interest rates in its January policy statement, saying it was concerned about the weak inflation environment. The loonie had a positive tone going into Wednesday's statement, with some support from data overseas that showed robust growth in the global services sector last month. That was in contrast with recent data that showed manufacturing growth in Europe and Asia slowed in February. Markets were generally less nervous about geopolitical risk on Wednesday than they had been earlier in the week as the United States and Russia were set to hold talks on easing tension over Ukraine. Canadian government bond prices were mixed across the maturity curve, with the two-year off 0.1 Canadian cent to yield 1.030 percent and the benchmark 10-year up 6 Canadian cents to yield 2.463 percent.
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