CANADA FX DEBT-C$ touches two-week high after inflation data

Fri Sep 19, 2014 9:56am EDT
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* Canadian dollar at C$1.0915 or 91.62 U.S. cents
    * Bond prices mixed across the maturity curve

    By Solarina Ho
    TORONTO, Sept 19 (Reuters) - The Canadian dollar touched its
strongest level against the U.S. dollar in nearly two weeks on
Friday after Canadian inflation data showed the closely watched
core inflation rate unexpectedly jumped above 2 percent in
    The overall annual inflation rate was steady at 2.1 percent,
in line with analysts' expectations, but above the Bank of
Canada's 2 percent target for the fourth straight month.
However, the core rate, which strips out the prices of some
volatile items, rose to 2.1 percent last month from 1.7 percent
in July, hitting a level last seen in April 2012. 
    At 9:22 a.m. (1322 GMT), the Canadian dollar was at
C$1.0915 to the greenback, or 91.62 U.S. cents, stronger than
Thursday's close of C$1.0947, or 91.35 U.S. cents. It briefly
touched C$1.0887, or 91.85 U.S. cents, its strongest level in
nearly two weeks.
    "It is sitting right now at its highs for the day ... so we
are up a bit. But we are also in this environment of broad U.S.
dollar strength, so it could be a little bit of a struggle for
Canada to really gain ground on this," said Camilla Sutton,
chief currency strategist at Scotiabank.
    The Canadian dollar was also higher against most key
currencies, extending Thursday's gains and reversing weakness 
earlier in the session.
    Also on Friday, data showed the value of Canadian wholesale
sales in July unexpectedly dropped by 0.3 percent from June,
dragged lower in part by softer sales of agricultural supplies.
    Canadian government bond prices were mixed across the
maturity curve, with the two-year down 3 Canadian
cents to yield 1.186 percent and the benchmark 10-year
 up 7 Canadian cents to yield 2.274 percent.

 (Additional reporting by Andrea Hopkins; Editing by Peter