CANADA FX DEBT-C$ weaker as inflation data boosts U.S. currency

* Canadian dollar at C$1.0865 or 92.04 U.S. cents
    * Bond prices lower across the maturity curve

    TORONTO, June 17 (Reuters) - The Canadian dollar eased
versus the U.S. currency on Tuesday, as the greenback was
boosted by data showing higher consumer prices, while Canadian
dollar traders sat on their hands ahead of key domestic data due
at the end of the week.
    At 10:20 a.m. (1420 GMT), the Canadian dollar was
at C$1.0865 to the U.S. dollar, or 92.04 U.S. cents, down from 
Monday's close of C$1.0841 to the U.S. dollar, or 92.24 U.S.
    U.S. consumer prices recorded their largest gain in more
than a year in May, pointing to a firming of inflation pressures
just as the U.S. Federal Reserve begins a two-day policy
    "The (U.S.) dollar has picked up some support from the
rising yields that we've seen at the longer end of the curve
after the CPI numbers this morning," Shaun Osborne, chief
currency strategist at TD Securities. 
    "I think along with that perhaps some focus on the FOMC
(statement) tomorrow is helping underpin the U.S. dollar here to
a degree."
    Canadian inflation and retail sales data due on Friday could
sharpen the picture somewhat on the Canadian interest rate
outlook. With upwards inflation pressure so far absent from the
Canadian economic picture, investors currently do not expect a
rate hike until well into 2015.
    Canadian government bond prices were lower across the
maturity curve, with the two-year down 22 Canadian
cents to yield 1.111 percent and the benchmark 10-year
 down 21 Canadian cents to yield 2.316 percent.

 (Reporting by Cameron French; Editing by James Dalgleish)