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.