CANADA FX DEBT-C$ hits another 4-year low, focus on central bank
* Canadian dollar at C$1.0953 or 91.30 U.S. cents * Bond prices lower across the maturity curve By Leah Schnurr TORONTO, Jan 15 (Reuters) - The Canadian dollar was slightly weaker against the greenback on Wednesday after hitting another four-year low in overnight trade as investors were wary that the Bank of Canada could turn more dovish at its upcoming policy meeting. The loonie has been on a downward trend since late October when the central bank abandoned any talk of rate hikes in its policy statement after 18 months of signaling that tightening was on the horizon. The selloff has intensified in recent sessions, fueled by disappointing economic data last week that helped send the currency through key technical barriers. In the first two weeks of 2014, the U.S. dollar has appreciated more than 3 percent against the Canadian currency. Some profit taking limited Wednesday's decline, but attention was turning toward next week's meeting of the Bank of Canada. Market expectations are building that the central bank could further soften its policy statement and perhaps step toward an outright easing bias, said Shaun Osborne, chief currency strategist at TD Securities in Toronto. "I think myself it's a little too early to expect that, I think the Bank's going to want to see more evidence on the inflation front before it takes that move," said Osborne. "But given the way Governor Poloz seems to be steering the policy supertanker at the moment, there's very definitely a risk of a shift at some point in the next few months." Bank of Canada chief Stephen Poloz earlier this month said the central bank should keep its key interest rate on hold until economic data persuades it otherwise. The Canadian dollar was at C$1.0953 to the greenback, or 91.30 U.S. cents, slightly weaker than Tuesday's close of C$1.0948, or 91.34 U.S. cents. The Canadian dollar earlier traded as far as C$1.0992, its lowest level since September 2009. Strength in the U.S. dollar also pressured the loonie after U.S. producer prices rose in December, while separate data showed manufacturing activity in New York state jumped this month. The U.S. dollar index was up 0.5 percent. Canadian government bond prices were lower across the maturity curve, with the two-year off half Canadian cent to yield 1.059 percent and the benchmark 10-year down 13 Canadian cents to yield 2.601 percent.
© Thomson Reuters 2016 All rights reserved.