CANADA FX DEBT-C$ extends gain after more optimistic central bank outlook

Thu Apr 16, 2015 9:41am EDT
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* Canadian dollar at C$1.2261 or 81.56 U.S. cents
    * Bond prices mixed across the maturity curve

    TORONTO, April 16 (Reuters) - The Canadian dollar extended
the previous session's hefty gain  against the greenback on
Thursday, helped in part by a broadly weaker U.S. dollar, but
the move was limited by lower oil prices.
    On Wednesday, the Canadian dollar powered to its strongest
level against the U.S. currency since the Bank of Canada's
surprise interest rate cut in January. The surge was spurred by
the central bank talking down the likelihood of another rate cut
anytime soon and offering a more positive view of economic
growth in the second half of the year. 
    * At 9:12 a.m. EDT (1312 GMT), the Canadian dollar 
was at C$1.2261 to the greenback, or 81.56 U.S. cents, stronger
than the Bank of Canada's official close of C$1.2300, or 81.30
U.S. cents, on Wednesday.
    * The Canadian dollar was trading between C$1.2251 and
    * The U.S. dollar fell after data showed the number of
Americans filing new claims for jobless benefits unexpectedly
rose by 12,000 last week to a seasonally adjusted 294,000, while
U.S. housing starts rose far less than expected in March.
Permits had their biggest fall since May 2014.
    * U.S. and Canadian inflation figures for March and Canadian
retail sales for February are among the key economic data due at
8:30 a.m. EDT on Friday. Some forecasters say the CPI data could
take a back seat to retail sales in Canada, with CPI
expectations already addressed by Wednesday's central bank
statement on rates and its monetary policy report. 
    * U.S. crude prices were down 1 percent at $55.83,
while Brent crude lost 1.1 percent to $62.62. 
    * The Canadian dollar, which was underperforming most of its
key currency counterparts, will likely hold between C$1.2250 and
C$1.2350 against the U.S. dollar on Thursday, according to
    * Canadian government bond prices were mixed across the
maturity curve, with longer-term yields lower. The two-year
 price was flat to yield 0.555 percent, while the
benchmark 10-year fell 10 Canadian cents to yield
1.355 percent.
    * The Canada-U.S. two-year bond spread was 5.9, while the
10-year spread was -52.3.

 (Reporting by Solarina Ho; Editing by Peter Galloway)