CANADA FX DEBT-C$ takes a breather from this week's rally
* Canadian dollar at C$1.1047 or 90.52 U.S. cents * Bond prices mostly higher across maturity curve By Leah Schnurr TORONTO, March 28 (Reuters) - The Canadian dollar weakened slightly against the greenback on Friday, taking a breather after this week's strong recovery from the multi-year lows it hit last week, while a lack of domestic economic data provided few catalysts for trade. The loonie fell to a 4-1/2 year low last week, pressured by the Bank of Canada saying it could not rule out an interest rate cut and by a potentially faster timetable for raising rates in the United States. But the currency was able to recoup all those losses this week and some analysts believe the selloff was likely overdone. "This week we just hit a bit of an air pocket in terms of the data, so nothing to really drive us," said Shaun Osborne, chief currency strategist at TD Securities in Toronto. After this week's recovery in the loonie, the U.S. dollar-Canadian dollar pairing was starting to look cheap, Osborne said. "I'm not sure we're going to go that much lower for now, this is a pretty decent correction in the overall scheme of things," he said. The Canadian dollar was at C$1.1047 to the greenback, or 90.52 U.S. cents, weaker than Thursday's close of C$1.1032, or 90.65 U.S. cents. Earlier, the currency rose to touch a three-week high of C$1.1001. For the week, the U.S. dollar has depreciated 1.6 percent against the loonie. Investors will return next week to a busier calendar of economic data with monthly domestic gross domestic product figures on tap on Monday. Through the week, markets will also take in other reports, including the trade balance and employment. "We've got a fair bit of data coming up next week, which might pull the market's attention back to some of the deficiencies in the Canadian story at the moment," Osborne said. Canadian government bond prices were mostly higher across the maturity curve, though the two-year was unchanged to yield 1.065 percent. The benchmark 10-year was up 6 Canadian cents to yield 2.428 percent. (Editing by Peter Galloway)
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