CANADA’S FX DEBT – Canadian greenback hits 7-week low as Fed catches BoC

 (Provides strategist quotes and particulars all through; updates costs)
    * Canadian greenback weakens 0.7% in opposition to the buck
    * Touches its weakest stage since Might 6 at 1.2279
    * Canada's annual inflation charge accelerates to three.6% in Might
    * Canadian authorities bond yields rise throughout the curve

    By Fergal Smith
    TORONTO, June 16 (Reuters) - The Canadian greenback weakened by
probably the most in 4 months in opposition to its U.S. counterpart on
Wednesday because the Federal Reserve introduced ahead its projections
for the primary post-pandemic rate of interest hikes, closing the hole
between it and the Financial institution of Canada.
    Fed policymakers on the median now see the primary charge
enhance coming in 2023 as a substitute of 2024, whereas the central financial institution
opened the talk on when and the way it could also be applicable to start out
tapering its huge bond-buying program.              
    Canada's central financial institution has already begun to taper
quantitative easing and has signaled it might start lifting its
key charge from a report low of 0.25% within the second half of subsequent
12 months.
    "The market was sure that the Financial institution of Canada can be the
first to hike charges by a substantial margin," mentioned Adam Button,
chief forex analyst at ForexLive. "Now the Federal Reserve
has had a change of coronary heart and could possibly be mountaineering earlier than
believed."    
    The Canadian greenback          was buying and selling 0.7% decrease at
1.2277 to the buck, or 81.45 U.S. cents, its greatest
decline since February.
    It touched its weakest stage since Might 6 at 1.2279. Earlier
this month, it notched a six-year excessive at 1.2007.
    Canada's annual inflation charge accelerated to three.6% in Might
from 3.4% in April, pushed by surging shelter and passenger
automobiles costs, Statistics Canada mentioned. That was barely forward
of analyst expectations and the best since Might 2011.
            
    Oil       , one among Canada's main exports, notched its
highest stage since October 2018 at $72.99 a barrel earlier than
settling at $72.15, up three cents on the day.             
    Canadian authorities bond yields rose throughout the curve,
monitoring the transfer in U.S. Treasuries. The ten-year            
was up 4.9 foundation factors at 1.432%.

 (Reporting by Fergal Smith; Enhancing by Andrea Ricci and
Alistair Bell)
  

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