CANADA FX DEBT-C$ retreats as U.S. dollar rallies on ECB

(Updates with comments, details, closing figures)
    * Canadian dollar at C$1.2506, or 79.96 U.S. cents
    * Bond prices mostly lower across the maturity curve

    By Solarina Ho
    TORONTO, March 5 (Reuters) - The Canadian dollar gave back
all of the previous session's gains on Thursday as the U.S.
dollar strengthened to 11-1/2 year highs against a basket of
currencies after the European Central Bank said it will launch a
massive bond-buying program to boost the economy.
     The ECB also raised its economic growth forecasts but cut
its inflation projection for 2015 to zero, reflecting the impact
of last year's sharp drop in oil prices and euro weakness.
    The loonie had strengthened sharply in the previous session
after the Bank of Canada kept interest rates steady and
indicated it was happy with how the market and the economy had
reacted to its surprise 25 basis point interest rate cut in
    "The bigger story for the Canadian dollar is the focus has
just shifted away from the Bank of Canada to the more global
picture," said Camilla Sutton, chief currency strategist at
    "All of the pieces were fairly negative ... so the
combination of all of it has weighed on the Canadian dollar, but
we're still within that broader range that we've been in for six
    The Canadian dollar, which has been trading between
about C$1.2350 and C$1.28 since late January, finished at
C$1.2506 to the greenback, or 79.96 U.S. cents, almost a cent
weaker than Wednesday's close of C$1.2416, or 80.54 U.S. cents.
    "The bias remains buying on USD/CAD dips," said Jeremy
Stretch, head of foreign exchange strategy at CIBC World Markets
in London.
    Stretch said downward momentum for the Canadian dollar may
be a little slower now with much of the uncertainty over the
Bank of Canada next rate move out of the way. Trading in the
loonie will be more reliant on crude prices and expectations for
the timing of a U.S. Federal Reserve rate hike, he said.
    Markets will be eyeing comments later on Thursday from
Federal Reserve Bank of San Francisco President John Williams
and Friday's U.S. employment data for February for further
    In Canada, data on the country's January trade balance on
Friday will also be in focus as the market looks for insight on
how nonenergy exports are performing with low oil prices hurting
energy exports.
    Canadian government bond prices were lower across the
maturity curve, with the two-year off 3.5 Canadian
cents to yield 0.623 percent and the benchmark 10-year
 giving back 21 Canadian cents to yield 1.527

 (Reporting by Solarina Ho; Editing by Peter Galloway)