CANADA FX DEBT-C$ steady with U.S. markets closed

Mon May 26, 2014 4:25pm EDT

* Canadian dollar at C$1.0860 or 92.08 U.S. cents
    * Bond prices lower across the maturity curve

 (Adds details, quotes, updates prices)
    By Leah Schnurr
    TORONTO, May 26 (Reuters) - The Canadian dollar was little
changed on Monday, sticking to its recent trading range in a
session made quiet by the U.S. Memorial Day holiday. 
    So far in May, the Canadian dollar has largely moved
sideways as analysts weigh generally improving economic data
against the Bank of Canada's neutral policy stance. The central
bank shifted away from its hawkish bias last October, pressuring
the loonie.
    Analysts say the currency could be hemmed in until there is
either a change in the Bank of Canada's tone or a breakout in
the U.S. dollar as the economic recovery south of the border
takes hold. Market focus is starting to turn to the Bank of
Canada's next policy statement, which will be issued next week.
    Volumes on Monday were muted with U.S. markets closed for
Memorial Day, while markets in London were also closed.
    "U.S dollar-Canadian dollar is staying in that range from
C$1.0845 to C$1.9895. It's a pretty narrow band but that's where
initial support and resistance comes in," said Don Mikolich,
executive director of foreign exchange sales at CIBC World
Markets in Toronto.
    The Canadian dollar ended the North American
session at C$1.0860 to the greenback, or 92.08 U.S. cents,
slightly stronger than Friday's close of C$1.0870, or 92.00 U.S.
cents. 
    The euro was little changed against the Canadian dollar as
investors took in the results of European Parliament elections.
While Euroskeptic nationalists racked up victories in France and
Britain, pro-European forces held firm in Germany and Italy.
 
    "Right now, we're not a point where we're going to see the
EU blow up or there's going to be any major changes in the
extremely near term," said Scott Smith, senior market analyst at
Cambridge Mercantile Group in Calgary.
    "The one surprising thing is that the surge in anti-EU
parties acts as a warning shot to the status quo in the European
zone right now."
    The euro was trading at C$1.4813.
    Canadian government bond prices were lower across the
maturity curve, with the two-year off 0.7 of a
Canadian cent to yield 1.058 percent and the benchmark 10-year
 down 16 Canadian cents to yield 2.324 percent.

 (Editing by Peter Galloway)
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