TORONTO, March 19 (Reuters) - The Canadian dollar edged lower against its U.S. counterpart on Wednesday as the greenback posted broad-based gains, but the move for the loonie was limited as the Federal Reserve marked down its outlook for growth in the world's largest economy.
The loonie was trading 0.1% lower at 1.4310 per U.S. dollar, or 69.88 U.S. cents, after moving in a range of 1.4296 to 1.4349.
The Fed held interest rates steady, as expected, but U.S. central bank policymakers indicated they still anticipate reducing borrowing costs by half a percentage point by the end of this year in the context of slowing economic growth and, eventually, a downturn in inflation.
"If I had to guess what the bond market is focusing on right now, it's the lower growth outlook," said Erik Bregar, director of FX and precious metals risk management at Silver Gold Bull. "Even though the Fed is only showing two cuts this year, it seems like the market wants to price in three again."The U.S. dollar (.DXY), was holding on to gains against a basket of major currencies after Turkey
detained President Tayyip Erdogan's main political rival, sending the lira sharply lower.
"Zooming out, I think the Turkish story is the main story for broad dollar strength," Bregar said. "It's been holding the euro back, the Canadian dollar and a bunch of other major currencies."
Domestic data showed that Canada's population in the fourth quarter increased at the slowest pace since the COVID-19 pandemic as a government crackdown on immigration announced last year takes shape.
Bank of Canada Governor Tiff Macklem is due to speak on Thursday about tariff-related uncertainty. Data on Tuesday showed Canadian inflation heating up more than expected in February.
Canadian bond yields eased across the curve, tracking moves in U.S. Treasuries. The 10-year was down 2.7 basis points at 2.996%.
Reporting by Fergal Smith; Editing by Paul Simao
