TORONTO, March 21 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Thursday as the Bank of Canada welcomed signs of cooler inflation and data showing continued strength in the U.S. economy helped the greenback notch broad-based gains.
The loonie was trading 0.3% lower at 1.3535 to the U.S. dollar, or 73.88 U.S. cents, after trading in a range of 1.3457 to 1.3541.
The currency was shedding some of the gains it posted on Wednesday when the release of the Federal Reserve's latest policy statement and updated economic projections briefly weighed on the greenback.
"The U.S. dollar went down the staircase and then took the elevator back up," said Marc Chandler, chief market strategist at Bannockburn Global Forex LLC. "Nearly every economic data (point) that was released today for the U.S. was stronger than expected."
The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, while sales of previously owned homes increased by the most in a year in February, signs the economy remained on solid footing in the first quarter.
Bank of Canada Deputy Governor Toni Gravelle said the central bank is likely to wrap up its quantitative tightening (QT) program in 2025, later than some analysts have expected, and that February's inflation figures were "very encouraging."
Data on Tuesday showed Canadian inflation cooling to an annual rate of 2.8% last month, its slowest pace since June.
The U.S. dollar (.DXY), opens new tab rose against a basket of major currencies, while the price of oil , one of Canada's major exports, settled 0.25% lower at $81.07 a barrel on weaker U.S. gasoline demand data.
Canadian government bond yields rose across the curve. The 10-year was up 2.9 basis points at 3.514%, after earlier touching a one-week low at 3.428%.
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Reporting by Fergal Smith; Editing by Paul Simao
