CANADA FX DEBT-C$ touches two-week high after inflation data
* 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 August. 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 Galloway)
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