* C$ at C$1.0325 vs US$, or 96.85 U.S. cents
* U.S. and UK markets closed for public holidays
* Bank of Canada expected to keep interest rate unchanged on
* Bond prices mostly lower
By Solarina Ho
TORONTO, May 27 The Canadian dollar held steady
on Monday with investors turning their attention to the Bank of
Canada on Wednesday after a mostly volatile previous week
following debate over when the Federal Reserve will pull back
its stimulus measures.
Trading was particularly quiet with the United States and
Britain both closed for public holidays.
The Canadian dollar was trading at C$1.0325 versus
the U.S. dollar, or 96.85 U.S. cents at 8:54 a.m. (1254 GMT),
range-bound from Friday's finish at C$1.0321, or 96.89 U.S.
Canada's dollar, which was mostly underperforming other
major currencies, was trading tightly between C$1.0301 and
C$1.0331 on Monday.
With little news to drive the currency, attention is focused
on the Bank of Canada, which will announce its next scheduled
interest rate decision on Wednesday. The central bank is
unanimously expected to keep its benchmark rate unchanged at 1
percent, according to a Reuters poll of 34 global economists.
"They will still continue to maintain their tightening bias,
because I think this at this stage Canada's (economy) weakening
off on its own. I don't think losing the bias to tighten is
something they'd be wanting to do at this stage," said Don
Mikolich, executive director, foreign exchange sales at CIBC
"The debate now is almost, is Canada or the U.S. going to
hike first, when it's always been assumed it'd be here."
Forecasters are expecting the bank to next hike interest
rates in the final quarter of 2014, which is not far off from
the Fed's expectations it will begin hiking around 2015.
Mikolich said there are no surprises expected on Wednesday,
but that the market will likely parse over any analysis on
growth and inflation projections.
Prices for Canadian government debt were mostly lower,
particularly for longer term bonds, with the two-year bond
shedding two Canadian cents to yield 1.042 percent
and the benchmark 10-year bond falling 15 Canadian
cents to yield 1.968 percent.