* C$ ends firmer at C$0.9913 vs US$, or $1.0088
* Bond prices drift lower across the curve
By Claire Sibonney
TORONTO, Dec 24 (Reuters) - The Canadian dollar ended
slightly higher against its U.S. counterpart in quiet Christmas
Eve trading on Monday as investors wait until after the holidays
for 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
some economists say threaten to send the economy back into
recession.
Although there is no official date for talks to resume, the
two sides have a few days after Christmas to find a compromise
before Jan. 1, when the tax and spending measures will start to
take effect under current law.
"People will take a bit of a break over the holidays and try
to see if they can reach some greater sense of collegiality on
the other side of turkey and eggnog," said David Tulk, chief
Canada macro strategist at TD Securities.
Tulk noted that the Canadian dollar was outperforming other
major currencies on Monday, but that the small move in such thin
volume was within the margin of error.
The Canadian dollar closed the North American
session at C$0.9913 versus the U.S. dollar, or $1.0088, modestly
stronger than Friday's finish at C$0.9934, or $1.0066.
North American markets closed early and are closed on
Tuesday. Most Canadian markets will remain shut on Wednesday for
Boxing Day.
The currency traded in a tight 34-point range between
C$0.9912 and C$0.9946, and trading was expected to remain very
quiet until later in the week.
Matt Perrier, director of foreign exchange sales at BMO
Capital Markets, said traders would be watching Canadian-dollar
support around C$0.9960 and resistance near C$0.9875-C$0.9900.
Canadian government bond prices edged lower across the
curve. The two-year bond was down 2 Canadian cents,
yielding 1.122 percent, while the benchmark 10-year bond
fell 12 Canadian cents to yield 1.816 percent.