CANADA FX DEBT-C$ retreats as Bank of Canada in focus; factory sales drag
* Canadian dollar at C$1.2559, or 79.62 U.S. cents * Bond prices mixed across the maturity curve TORONTO, April 15 (Reuters) - The Canadian dollar softened against a rebounding greenback on Wednesday ahead of the Bank of Canada's latest rate decision and monetary policy report later in the day. The loonie also weakened modestly because of data showing Canadian manufacturing sales fell 1.7 percent to C$50.04 billion in February, hurt by auto plant closures. Market analysts had forecast an increase of 0.4 percent. The Bank of Canada, which will hold a press conference at 11:15 a.m. EDT (1515 GMT) following the 10 a.m. rate announcement, is widely expected to keep interest rates on hold at 0.75 percent. Market participants want to hear how the central bank may have changed its forecast for Canada's growth as the effects of cheaper oil become clearer. The U.S. dollar rose after Tuesday's retreat on disappointing U.S. retail sales data. The currency's impact on the Canadian dollar outweighed a rise in crude prices. * At 9:00 a.m. EDT, the Canadian dollar was trading at C$1.2559 to the greenback, or 79.62 U.S. cents, weaker than the Bank of Canada's official close of C$1.2490, or 80.06 U.S. cents on Tuesday. * The loonie has ranged from C$1.2570 to C$1.2477 overnight and into the early North American session on Wednesday. * Data showed China's economy grew at its slowest pace in six years, raising expectations that a rate cut and lower bank reserve requirements are coming soon. The news also put some pressure on commodities-linked currencies. * U.S. crude prices were up 1.63 percent at $54.16, while Brent crude added 1.37 percent to $59.23. * RBC Capital Markets said it expected the Canadian dollar, which was underperforming nearly all of its key currency counterparts, to trade between C$1.2480 and C$1.2580 against the U.S. dollar during the North American trading session on Wednesday. * Canadian government bond prices were mixed across the maturity curve, with longer-term yields higher. The two-year price was up 1 Canadian cent to yield 0.507 percent and the benchmark 10-year rose 11 Canadian cents to yield 1.307 percent. * The Canada-U.S. two-year bond spread was -0.1, while the 10-year spread was -58.6. (Reporting by Solarina Ho; Editing by Lisa Von Ahn)
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