* C$ lower at C$1.0475 to the US$, or 95.47 US cents
* Central bank report paints brighter growth picture
* Bond prices flat to slightly higher (Adds details, quote)
TORONTO, Jan 21 (Reuters) - The Canadian dollar sagged against the U.S. currency on Thursday, pressured by weak oil prices, while largely shrugging off a Bank of Canada report that painted a slightly rosier inflation and growth picture.
In its Monetary Policy Report, the central bank raised its economic growth projection for the final three quarters of this year and forecast inflation throughout 2010 would be higher than it had expected. [ID:nBAC002364]
The Canadian currency's reaction was muted, said Camilla Sutton, currency strategist at Scotia Capital, noting that in its decision on Tuesday to keep rates unchanged, the central bank had covered much of the same ground.
"The report was very neutral. It was very much in line with the commentary we heard on Tuesday. They'd already given us some insight on growth changes so we just have that now firmed up," she said.
After the report's release, central bank Governor Mark Carney repeated the bank's pledge to keep interest rates at current levels until the end of June as long as inflation remains in check. He declined to forecast rates beyond June.
At 12:15 p.m. (1715 GMT), the Canadian dollar was at C$1.0475 to the U.S. dollar, or 95.47 U.S. cents, a sliver below Wednesday's finish of C$1.0470 to the U.S. dollar, or 95.51 U.S. cents.
Earlier, the Canadian dollar hit a low of C$1.0525, or 95.01 U.S. cents, hurt by broad U.S. dollar strength.
By midday the greenback had given up gains against the yen made earlier on Thursday as increased risk aversion knocked stocks lower and as President Barack Obama announced plans to place new limits on some proprietary bank trading. [FRX/]
Those pressures on the greenback helped the Canadian currency fight back, said Michael Gregory, senior economist at BMO Capital Markets.
Canadian government bond prices were mixed but mostly higher, mirroring U.S. Treasuries, which rose as stocks tumbled and money flowed to less risky assets. [US/]
"Part of that is related to risk. U.S. Treasury market yields are down and prices are up pretty solidly. Canada is following that a little," Gregory said.
The two-year bondwas largely unchanged, down 1 Canadian cent at C$100.08 to yield 1.209 percent. The 30-year bond climbed 23 Canadian cents to C$116.50 to yield 4.002 percent. (Editing by Peter Galloway)
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