CANADA FX DEBT-C$ gains as U.S. Fed comments weaken greenback
* Canadian dollar at C$1.2142 or 82.36 U.S. cents * Bond prices mixed across the maturity curve TORONTO, June 18 (Reuters) - The Canadian dollar strengthened further against a broadly weaker U.S. dollar on Thursday as markets reacted to the Federal Reserve's more-dovish-than-forecast comments about the expected pace of policy tightening. The Fed is still expected to raise interest rates sometime this year. It signaled on Wednesday, though, that increases could start later than anticipated, with the U.S. economy growing more slowly than previously forecast after contracting in the first quarter. * At 9:05 a.m. EDT (1305 GMT), the Canadian dollar was at C$1.2142 to the greenback, or 82.36 U.S. cents, much firmer than the Bank of Canada's Wednesday close of C$1.2236, or 81.73 U.S. cents. * The currency has traded between C$1.2127 and C$1.2238 so far in the session. * The number of Americans filing new claims for unemployment benefits fell more than expected last week, dropping 12,000 to a seasonally adjusted 267,000, and pointed to a tightening labor market. * The U.S. consumer price index in May recorded its largest increase in more than two years, rising 0.4 percent as gasoline prices surged. Core CPI, which strips out food and energy costs, increased 0.1 percent, the smallest rise since December. Core CPI rose 1.7 percent in the 12 months through May. * The Canadian dollar is expected to trade between C$1.2120 and C$1.2200 against the U.S. dollar during Thursday's North American session, according to RBC Capital Markets. * Canadian government bond prices were mixed across the maturity curve, with the shorter-term notes slightly higher. The two-year was down 3 Canadian cents to yield 0.619 percent, and the benchmark 10-year was down 34 Canadian cents to yield 1.790 percent. (Reporting by Solarina Ho; Editing by Lisa Von Ahn)
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