* Canadian dollar at C$1.1199 or 89.29 U.S. cents * Bond prices higher across the maturity curve By Leah Schnurr TORONTO, March 21 (Reuters) - The Canadian dollar got a reprieve from recent heavy selling and firmed against the greenback on Friday after data showed that inflation was higher than expected last month, while retail sales rebounded in January. While the annualized inflation rate slowed to 1.1 percent in February from 1.5 percent the previous month, it beat expectations for a 0.9 percent rise in consumer prices. The loonie touched a session high shortly after the data was released as the market saw the number as relieving pressure on the Bank of Canada to cut interest rates. The bank has signaled concern about the weak inflation environment Economists had anticipated that a jump in prices in February of last year would skew the yearly comparison. Bank of Canada Governor Stephen Poloz said earlier in the week that he expected lower February inflation because of that base effect. "Inflation is still low, but at least we've moved into the (central bank's) target range, so that will probably ease some of that discussions of the need for Bank of Canada to maybe introduce some rate cuts, and with that it should provide a bit of support for the Canadian dollar," said Paul Ferley, assistant chief economist at Royal Bank of Canada in Toronto. The Canadian dollar was hit hard earlier in the week by more dovish-than-expected comments by Poloz, who left the door open to a potential cut in interest rates. Poloz's comments, combined with uncertainty about when the United States may raise rates, helped take the loonie to a 4-1/2 year low on Thursday. The currency also got a boost from a strong increase in retail sales for January as the economy shook off some of the weather-related effects that had depressed activity in December. The Canadian dollar was at C$1.1199 to the greenback, or 89.29 U.S. cents, stronger than Thursday's close of C$1.1242, or 88.95 U.S. cents. The loonie touched a session high of C$1.1174. Investors will be watching comments from a number of U.S. Federal Reserve policymakers on Friday, just two days after Fed Chair Janet Yellen surprised markets by signaling a potentially faster timetable for raising rates than had been anticipated. Minneapolis Federal Reserve Bank President Narayana Kocherlakota earlier on Friday said the Fed should have promised to keep rates near zero until U.S. unemployment falls below 5.5 percent, as long as inflation and financial stability risks are contained. Kocherlakota was the sole dissenter to the Fed's policy decision this week, which dropped its promise to keep rates at ultra-low levels until the unemployment rate fell to at least 6.5 percent. Canadian government bond prices were higher across the maturity curve, with the two-year up 1-1/2 Canadian cents to yield 1.064 percent and the benchmark 10-year up 6 Canadian cents to yield 2.494 percent. (Additional reporting by Allison Martell, Editing by Peter Galloway)