CANADA FX DEBT-C$ retreats more than 1 pct in post-Fed correction
(Updates with comment, closing figures and details) * Canadian dollar ends at C$1.2726 or 78.58 U.S. cents * Bond prices higher across the maturity curve By Solarina Ho TORONTO, March 19 (Reuters) - The Canadian dollar lost more than 1 percent against the greenback on Thursday, after making hefty gains the day before, as market participants bought back the U.S. dollar and as oil prices softened. The U.S. dollar tumbled against a range of currencies on Wednesday after the U.S. Federal Reserve gave a much more cautious statement on raising interest rates than anticipated. The Canadian dollar surged more than 2 percent on Wednesday. "I think there's still a pretty sizeable bias to hold on to CAD shorts for now," said Bipan Rai, director of foreign exchange strategy at CIBC World Markets. The Canadian dollar ended the session at C$1.2726 to the U.S. dollar, or 78.58 U.S. cents, roughly 1.3 percent weaker than Wednesday's close of C$1.2570, or 79.55 U.S. cents. The currency was also hurt by another dive in the price of oil, a key Canadian export. Brent crude lost nearly 3 percent, settling below $55 a barrel, while U.S. crude gave back nearly 2 percent to settle just under C$44. Oil was pressured by the rebounding U.S. dollar and by comments from Kuwait's oil minister, who said OPEC has no choice but to keep production steady, renewing concerns about a global oil surplus. The Bank of Canada surprised markets with a 25 basis point rate cut in January to provide "insurance" against the impact of oil's price drop on the economy. "We don't really think crude prices at these levels will lead them to cut rates again in April," Rai said. "Still, market psychology is a different animal altogether, so the CAD could be taking a bit of a hit as to the way crude's been trading today." Investors are turning to Canadian retail sales data for January and inflation data for February on Friday for further direction. Canadian government bond prices were higher across the maturity curve, with the two-year up 1 Canadian cent to yield 0.479 percent and the benchmark 10-year climbing 9 Canadian cents to yield 1.314 percent. (Editing by Peter Galloway)
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