March 28, 2018 / 8:53 PM / 6 months ago

CANADA FX DEBT-C$ weakens as U.S. growth revised up; domestic GDP on tap

    * Canadian dollar at C$1.2925 or 77.37 U.S. cents
    * Bond prices higher across the maturity curve

 (Adds details, quote, updates prices)
    March 28 (Reuters) - The Canadian dollar weakened against
the greenback on Wednesday as the U.S. currency was boosted by
stronger economic growth figures and ahead of data that will
show how the domestic economy fared at the start of the year.
    U.S. gross domestic product expanded at a 2.9 percent annual
rate in the final three months of 2017, instead of the
previously reported 2.5 percent, the Commerce Department said in
its third GDP estimate for the period on Wednesday.             
    The figures helped lift the greenback 0.8 percent against a
basket of currencies        to the detriment of the loonie.
    "The revision to the data today showed that the economy is
doing quite strongly in the U.S., so that obviously bodes well
for the U.S. dollar and the likelihood that the Fed will keep
their path toward raising rates," said Rahim Madhavji, president
at KnightsbridgeFX.com.        
    At 4:25 p.m. EDT (2025 GMT), the Canadian dollar         
was trading down 0.3 percent at C$1.2925 to the greenback, or
77.37 U.S. cents.
    Investors will get a look at monthly Canadian GDP on
Thursday, with economic growth expected to have picked up by
just 0.1 percent in January.
    Canada is coming off an exceptionally strong 2017, and
analysts are looking to see how much growth can be sustained
following three interest rate increases and tighter mortgage
regulations that are expected to dampen the housing market.
    "I think what people are focusing on is what's the tone of
growth, where is the economy going and whether or not there's
enough strength in the economy and enough momentum to continue
to see the Bank of Canada's pricing around two rate hikes this
year continue to hold up," said Mark McCormick, North American
head of FX strategy at TD Securities in Toronto.
    Ontario was the latest province to release its budget,
saying late on Wednesday it would boost spending on healthcare
and childcare as it made a swift return to running deficits and
projected a long road back to balance.             
    Canadian government bond prices were higher across the
maturity curve, with the two-year            price up 4.5
Canadian cents to yield 1.806 percent and the benchmark 10-year
            rising 20 Canadian cents to yield 2.119 percent.

 (Reporting by Karen Brettell in New York and Leah Schnurr in
Ottawa; editing by Jonathan Oatis)
  
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