CANADA FX DEBT-C$ hits weakest level in nearly a month as greenback surges
* Canadian dollar at C$1.2635, or 79.14 U.S. cents * Bond prices higher across the maturity curve TORONTO, March 10 (Reuters) - The Canadian dollar on Tuesday fell to its weakest level in nearly a month against the soaring U.S. currency, as confusion about the Bank of Canada's stance contrasted with growing confidence that the U.S. Federal Reserve will start lifting rates by mid-year. The Canadian currency has been hurt by slumping oil prices and then by the central bank's shock January rate cut response. Many strategists admit to being unsure of the bank's next move. "Confidence is not a thing you really associate with the Bank of Canada outlook these days," said Shaun Osborne, chief currency strategist at TD Securities. Meanwhile, another stellar set of U.S. jobs data on Friday and a subsequent chorus of hawkish Fed policymaker comments has pushed the greenback to multi-year highs against the euro and yen. The Canadian dollar was at C$1.2635 to the greenback, or 79.14 U.S. cents, in North American morning trade, weaker than Monday's close of C$1.2596, or 79.39 U.S. cents. Earlier Tuesday, the loonie fell to C$1.2683, or 78.85 U.S. cents, its weakest level since Feb. 11. Oversupply and weak demand hobbled oil prices, which also hurt the currency of Canada, a major oil producer. Further currency weakness is likely, as the impact of cheap oil likely flows through to economic data in coming months. "It's very difficult to see the Canadian dollar recovering significantly anytime soon without some pretty material things changing," Osborne said. "That is to say the economy picks up significantly or we see a big turnaround in crude prices that gives the currency a psychological lift at least." Canadian government bond prices were higher across the maturity curve, with the two-year up 2.5 Canadian cents to yield 0.587 percent and the benchmark 10-year up 49 Canadian cents to yield 1.521 percent. (Reporting by Alastair Sharp Editing by W Simon)
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