CANADA FX DEBT-C$ firms as US$ retreats ahead of Fed minutes

* Canadian dollar at C$ 1.2428 or 80.46 U.S. cents * Bond prices mixed across the maturity curve TORONTO, April 8 (Reuters) – The Canadian dollar strengthened against its U.S. counterpart on Wednesday as the greenback softened ahead of the release of minutes from the U.S. Federal Reserve’s last policy meeting.

The U.S. dollar index, which measures the greenback against a basket of currencies, was lower on market caution as participants looked to the Fed minutes for clues on whether policymakers are concerned about the impact of the strong U.S. dollar on the country’s economy, which softened notably through the first quarter.

With little on the domestic economic calendar until Friday’s Canadian employment numbers for March, the loonie’s direction will likely be heavily U.S. dollar-driven.

* At 9:09 a.m. EDT (1309 GMT), the Canadian dollar was trading at C$ 1.2428 to the greenback, or 80.46 U.S. cents, stronger than the Bank of Canada’s official close on Tuesday of C$ 1.2504, or 79.97 U.S. cents.

* The currency’s strongest level of the session was C$ 1.2388 Its weakest level was C$ 1.2511.

* FOMC minutes from the Fed’s March meeting will be released at 2:00 p.m. EDT (1800 GMT).

* Canadian Finance Minister Joe Oliver will be speaking on Wednesday ahead the federal budget, which is set to be released on April 21.

* The Canadian dollar is expected to trade between C$ 1.2370 and C$ 1.2460 against the U.S. dollar during the North American session on Wednesday, according to RBC Capital Markets.

* Canadian government bond prices were mixed across the maturity curve, with the two-year price flat to yield 0.501 percent and the benchmark 10-year rising 7 Canadian cents to yield 1.337 percent.

* The Canada-U.S. two-year bond spread is -1.9, while the 10-year spread is -54.6.

(Reporting by Solarina Ho; Editing by Peter Galloway)