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* C$ at C$1.0254 vs US$, or 97.52 U.S. cents * March inflation slowed to 1.0 pct from 1.2 pct in Feb * Bond prices mixed By Solarina Ho TORONTO, April 19 (Reuters) - The Canadian dollar held steady against its U.S. counterpart on Friday, as domestic March inflation data weakened from February and with little other economic news to drive the currency. The annual inflation rate last month slowed to 1.0 percent from 1.2 percent in February, further underlining how little pressure there is on the Bank of Canada to raise rates any time soon. "After quite a bit of volatility in the prior few months, Canadian inflation has shown its true colors a little more clearly this month - and those colors are pretty bland. For a change there wasn't a big surprise," said Doug Porter, chief economist at BMO Capital Markets. Overnight index swaps, which trade based on expectations for the central bank's key policy rate, showed that after the announcement traders trimmed their very small bets on an interest rate cut later this year. At 9:02 a.m. (1302 GMT), the Canadian dollar was trading at C$1.0254 versus the U.S. dollar, or 97.52 U.S. cents, little changed from Thursday's North American close at C$1.0260, or 97.47 U.S. cents. After a volatile week that saw the currency weaken more than 1 percent, it was trading between a narrow band of C$1.0233 and C$1.0266 on Friday, and underperforming against most other currencies. Canadian government bond prices were mixed, with the two-year bond unchanged with a yield of 0.940 percent, while the benchmark 10-year bond shed 2 Canadian cents to yield 1.708 percent.