CANADA FX DEBT-C$ strengthens while eyeing Fed, domestic data
* C$ at C$1.1053 vs US$, or 90.47 U.S. cents * Bond prices higher across the maturity curve * Market players await Fed, domestic data catalysts By Solarina Ho and Alastair Sharp TORONTO, March 13 (Reuters) - The Canadian dollar strengthened against the greenback on Thursday, but was seen trapped in a tight range until domestic data or the U.S. Federal Reserve gives it reason to move more drastically next week. The Canadian currency is likely hemmed into a C$1.1050-C$1.1120 range at least until the U.S. Federal Reserve central bank meets next week, according to Darren Richardson, manager of corporate dealing for North America at CanadianForex. "There is a good chance that the market doesn't get exactly what they expected" from the Fed, he said. It will be the Fed's first policy-setting meeting with Janet Yellen as chair, and will likely aim to finesse a rewriting of the bank's promise to keep U.S. interest rates low without roiling financial markets. A dearth of meaningful domestic data has left the loonie, as Canada's currency is colloquially known, looking outside its borders and to technical analysis for motivation recently. Inflation and retail sales data for Canada due next week could also move the currency, strategists said. Brent crude oil prices were lower as weak economic data in China offset fears that a dispute over Ukraine between Russia and Western powers could escalate and disrupt supplies. China worries also haunted copper prices after a brief recovery, with the health of the world's second largest economy in question. "We strengthened in the overnight, but we seem to be treading water a little bit here," said David Tulk, chief Canada macro strategist at TD Securities. "We're going to have to wait until we get some Canadian data to really determine sentiment one way or another," he said. With little domestic data to drive direction, the Canadian dollar and its Australian and New Zealand counterparts had been under pressure earlier this week as commodity prices softened. Moves in the Canadian dollar are often driven by sentiment over commodities, as much of the country's oil, mineral and food production are exported. The Canadian dollar ended the session changing hands at C$1.1053 per U.S. dollar, or 90.47 U.S. cents, stronger than Wednesday's close of C$1.1116 or 89.96 U.S. cents. The Canadian dollar briefly pared gains after U.S. data showed retail sales rebounded in February, while new applications for U.S. unemployment benefits touched a three-month low last week. The New Zealand dollar was bolstered by a rise in central bank rates and hints of more to come, while stronger-than-expected jobs data lifted the Aussie. Canadian government bond prices were higher across the maturity curve, with the two-year bond up 2 Canadian cents to yield 1.010 percent and the benchmark 10-year up 62 Canadian cents to yield 2.387 percent.
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