* Canadian dollar at C$1.1042 or 90.56 U.S. cents
* Bond prices higher across the maturity curve
By Leah Schnurr
TORONTO, March 18 (Reuters) - The Canadian dollar firmed
against the greenback on Tuesday on data that showed a
stronger-than-expected recovery in factory sales in January and
on comments by Russian President Vladimir Putin that helped calm
fears about the Ukraine crisis.
Putin signed a treaty on Tuesday making Crimea part of
Russia, defying Western sanctions, but said he did not plan to
seize any other regions of Ukraine.
The move came after a disputed referendum in Crimea over the
weekend that showed voters in favor of being reunited with
Russia. Moscow took control of Crimea late last month following
the ouster of Ukraine's president.
"There were a lot of question marks in the air about how
Putin would respond to the sanctions against individuals in
Russia and Ukraine, and what the annexation of Crimea meant as
far as Russia's next steps," said Scott Smith, senior market
analyst at Cambridge Mercantile Group in Calgary.
"Because markets didn't see (Putin's comments) as a great
escalation from the sanctions already imposed on Russia in terms
of blow-back from Russia, we got a boost in risk appetite."
At home, figures showed factory sales climbed 1.5 percent in
January, the fastest pace in nearly a year and well above the
market forecast of a 0.6 percent gain, making up for the revised
1.5 percent downturn in December. The loonie briefly touched a
session high immediately following the release of the data.
The Canadian dollar was at C$1.1042 to the
greenback, or 90.56 U.S. cents, stronger than Monday's close of
C$1.1053, or 90.47 U.S. cents.
Market focus on Tuesday was on a speech and press conference
by Bank of Canada Governor Stephen Poloz later in the day.
Monetary policy has been a major driver of the Canadian dollar
in recent months after the central bank shifted gears last year
by dropping any mention of interest rate hikes on the horizon.
"I think the markets are fairly well positioned for what he
could potentially say," Smith said. "I would assume we're going
to get something very much in line with what we saw with the
last Bank of Canada rate statement."
At its most recent policy announcement in early March, the
Bank of Canada continued to express concerns about weak
inflation and repeated its next move on interest rates could be
in either direction.
Canadian government bond prices were higher across the
maturity curve, with the two-year up half a Canadian
cent to yield 1.025 percent and the benchmark 10-year
up 9 Canadian cents to yield 2.422 percent.