CANADA FX DEBT-C$ firms as risk aversion fades after Crimea vote

* Canadian dollar at C$1.1076 or 90.29 U.S. cents
    * Bond prices lower across the maturity curve

    By Leah Schnurr
    TORONTO, March 17 (Reuters) - The Canadian dollar
strengthened against the greenback on Monday on market relief
that the referendum in Crimea on Sunday passed without major
incident, making investors less averse to risk. 
    Crimea formally applied to join Russia on Monday after the 
result of referendum, which Ukraine called illegal, was strongly
in favor of seceding from Ukraine. European Union foreign
ministers met to decide on sanctions against Russian and Crimean
officials held responsible for Moscow's military seizure of the
southern Ukrainian region. 
    The Canadian dollar had been weaker on Friday as investors
looked for safe havens ahead of the vote, fearing a major
escalation of geopolitical tension. 
    But the outcome was largely as expected and already priced
into the market, said Don Mikolich, executive director of
foreign exchange sales at CIBC World Markets in Toronto.
    "The next steps now are just to see exactly whether Russia's
ambitions go further than Crimea or if this is the end target," 
Mikolich said. "Politically, I think there will still be some
discussion, as governments aren't recognizing the results and
what that will mean for future sanctions."
    The Canadian dollar was at C$1.1076 to the
greenback, or 90.29 U.S. cents, stronger than Friday's close of
C$1.1095, or 90.13 U.S. cents.
    Strength in the currency was limited by uncertainty over
developments in China, where the central bank loosened its grip
on the yuan over the weekend by doubling the daily trading range
for the currency. 
    China has promised it will allow market forces to play a
greater role in the economy and its markets. The move follows
recent concerns about the implications of slowing growth in
    "To some degree that reflects their weakening growth
prospects and hence is weighing on commodity prices, which also
act to soften the Canadian dollar," Mikolich said.
    The loonie is frequently sensitive to developments in China,
which is the world's second-largest economy and a major consumer
of natural resources.
    Data on Monday showed foreigners returned to buying Canadian
securities in January, acquiring C$1.09 billion ($980 million)
in Canadian assets after a large divestment in December. The
data had little immediate impact on the loonie. 
    Canadian government bond prices were lower across the
maturity curve, with the two-year off 2 Canadian
cents to yield 1.020 percent and the benchmark 10-year
 down 9 Canadian cents to yield 2.405 percent.