UPDATE 2-Canada April inflation well under forecast, Bank of Canada range

Fri May 17, 2013 9:43am EDT
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* Annual inflation 0.4 pct; monthly -0.2 pct

* Core inflation 1.1 pct; monthly 0.1 pct

* Forecast for overall inflation was 0.6 percent, core 1.2 pct

* Lowest inflation since October 2009

* Canada dollar down sharply, bonds rise

By Randall Palmer

OTTAWA, May 17 (Reuters) - Cheaper gasoline and cars helped Canada's annual inflation rate fall dramatically in April to 0.4 percent from 1.0 percent in March - its lowest rate since 0.1 percent in October 2009, below expectations and well outside the Bank of Canada's target range of 1 to 3 percent.

The data released by Statistics Canada on Friday depressed the Canadian dollar sharply and boosted bond prices, as the market figured it made any interest rate by the Bank of Canada even less likely than before.   Continued...