CANADA FX DEBT-C$ slips from 3-week high as oil prices fall
* Canadian dollar at C$1.4075, or 71.05 U.S. cents * Currency made a three-week high earlier in the session * Bond prices lower across the maturity curve TORONTO, Jan 27 (Reuters) - The Canadian dollar was unchanged against its weaker U.S. counterpart on Wednesday, down from a three-week high reached earlier in the session, as crude oil prices fell. The greenback weakened against a basket of major currencies ahead of the U.S. Federal Reserve policy announcement due this afternoon. The Fed is expected to leave interest rates unchanged and acknowledge that turmoil in financial markets threatens its upbeat view of the U.S. economy. Oil futures fell more than 1 percent after a surprise rise in U.S. inventories wiped out optimism that had built up on Tuesday over the potential for a deal to address a global crude supply glut. Nonetheless, the Canadian dollar traded at its strongest level since the Bank of Canada surprised many traders last week and left its policy rate on hold at 0.50 percent. The implied probability of a rate cut in March has dwindled to 15 percent from 80 percent before the interest rate decision. At 9:47 a.m. EST (1447 GMT), the Canadian dollar was trading at C$1.4075 to the greenback, or 71.05 U.S. cents, unchanged from Tuesday's official close. The currency reached its strongest level since Jan. 6 at C$1.4041, while its weakest was C$1.4156. Canadian government bond prices were lower across the maturity curve, with the two-year down 2.5 Canadian cents to yield 0.444 percent and the benchmark 10-year falling 12 Canadian cents to yield 1.277 percent. The Canada-U.S. 10-year bond spread was 2.1 basis points more negative at -75.2 basis points as U.S. Treasuries underperformed. Investors are awaiting Friday's Canadian gross domestic product data for November, which is expected to show a rebound in growth after a contraction in October. (Reporting by Fergal Smith; Editing by Lisa Von Ahn)
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