* C$ at C$0.9808 to the U.S. dollar, or $1.0196
* Bonds firmer across curve, tracking U.S. Treasuries
TORONTO, June 8 (Reuters) - Canada's dollar weakened against its U.S. counterpart on Wednesday, pressured by the Federal Reserve's downbeat comments on Tuesday about the U.S. economy, the destination for most Canadian exports.
Fed Chairman Ben Bernanke acknowledged the U.S. economy has slowed, but did not offer hints that the Fed may come to the economy's rescue once again. [ID:nN07142566]
"The thing that I'm taking out of it is he's saying inflation is going to be temporary," said John Curran, senior vice president at CanadianForex, a commercial foreign exchange dealing firm.
"If they're not going to raise interest rates, neither is Canada because we can't get too far ahead the States."
Higher interest rates tend to support currencies by attracting international capital flows. A recent poll had showed Canada's central bank was expected by many to resume its rate hike campaign in September. <CA/POLL>
At 9:10 a.m. (1310 GMT), the currencystood at C$0.9808 to the U.S. dollar, or $1.0196, down from Tuesday's North American finish of C$0.9755 to the U.S. dollar, or $1.0251.
A report on Wednesday showed Canadian housing starts rose in May to a slightly higher-than-expected seasonally adjusted annual rate of 183,600 units, boosted by a pickup in multi-unit buildings like condominiums. [CAHSTA=ECI]
But Curran noted that much of Canada's own economic data has been "mediocre at best" and investors were now focused on employment numbers out on Friday.
"People are keeping their powder dry for Friday's (job) number... You see a lousy number on Friday, we'll be trading on a C$0.9900 handle for sure," he said.
Curran expects the Canadian dollar to trade between the C$0.9850 and C$0.9760/65 range on Wednesday.
A dip in U.S. crude prices also did not help the commodity-linked currency. Oil and gas is a key Canadian export, and the currency can be sensitive to movements in crude prices. [O/R]
Canadian bond prices were firmer across the curve, tracking movements in U.S. treasuries after Bernanke's comments. [US/]
The two-year bondwas up 3 Canadian cents to yield 1.429 percent, while the 10-year bond added 8 Canadian cents to yield 3.022 percent. (Editing by Jeffrey Hodgson)
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