CANADA FX DEBT-C$ little changed as 'fiscal cliff' eyed
* C$ flat at C$0.9928 vs US$, or $1.0073 * Bond prices drift lower across the curve By Claire Sibonney TORONTO, Dec 24 (Reuters) - The Canadian dollar was little changed against its U.S. counterpart in quiet Christmas Eve trading on Monday as investors looked ahead to after the holidays for any developments in deadlocked U.S. budget talks. Markets were left in limbo last week when President Barack Obama and U.S. lawmakers suspended talks until after Christmas on avoiding $600 billion of spending cuts and tax increases that threaten to send the economy back into recession. Although there is no official date for talks to resume, the two sides still have a few days after Christmas to find a compromise before Jan. 1, when the tax and spending measures start to take effect. "Time is running out. Certainly with holiday liquidity, year-end, and the 'fiscal cliff' overhang, be prepared for the unexpected, I think. But for today, it's going to be a very quiet day," said Matt Perrier, director of foreign exchange sales at BMO Capital Markets. Most political experts and economists expect a U.S. budget deal of some sort. If the talks fail, the "fiscal cliff" could wipe as much as 4 percent off U.S. GDP next year, choking the global recovery before it gets going. At 9:05 a.m. (1405 GMT), the Canadian dollar stood at C$0.9928 versus the U.S. dollar, or $1.0073, just slightly stronger than Friday's North American session close at C$0.9934, or $1.0066. The currency was trading in a tight 26-point range between C$0.9920 and C$0.9946. Looking ahead, Perrier said traders would be watching Canadian-dollar support around C$0.9960 and resistance around C$0.9875-C$0.9900. Trading was expected to remain very quiet until later in the week, with most North American markets closing early on Monday ahead of Christmas on Tuesday, and many Canadian markets remaining shut on Wednesday for Boxing Day. Canadian government bond prices edged lower across the curve. The two-year bond was down 3 Canadian cents, yielding 1.127 percent, while the benchmark 10-year bond fell 25 Canadian cents to yield 1.831 percent.