CANADA FX DEBT-C$ little changed as Ukraine, Gaza crises cut risk appetite

* Canadian dollar at C$1.0730 or 93.20 U.S. cents
    * Bond yields mostly down, 10-year at lowest in a year

 (Adds details, quotes, updates prices)
    By Leah Schnurr
    TORONTO, July 21 (Reuters) - The Canadian dollar was little
changed against the greenback on Monday, hemmed in by a lack of
risk appetite in global markets as fighting flared in Ukraine
and hostilities continued in Gaza.
    With the Bank of Canada sticking to its neutral policy
stance and with little domestic economic data on tap, the loonie
was expected to trade in a range in the short term, but market
focus was on the hot spots around the world.
    In Ukraine, fighting broke out in the eastern city of
Donetsk, while a train carrying the remains of the victims of
last week's downed Malaysian flight left the site.
    Meanwhile, the death toll from the two-week conflict between
Israeli forces and Palestinian militants passed 500, while the
United States took a direct role in efforts to secure a
    While markets as a whole have fluctuated with changes in
risk appetite, a rise in oil prices helped put a floor under the
Canadian dollar, said Mark Chandler, head of Canadian fixed
income and currency strategy at Royal Bank of Canada in Toronto.
    The loonie is often sensitive to movements in oil prices as
Canada is a major producer of oil and natural resources. U.S.
oil for September settled up 91 cents at $102.86 a
    "Realistically, when people look at these movements and what
it means for the Canadian dollar, the most immediate focus tends
to fall on oil prices," said Chandler. "That's been relatively
supportive and that's one of the reasons why we've had a little
bit of a bid in the Canadian dollar."
    The Canadian dollar ended the North American
session at C$1.0730 to the greenback, or 93.20 U.S. cents,
slightly stronger than Friday's close of C$1.0736, or 93.14 U.S.
    In a relatively subdued week, Wednesday's Canadian retail
sales data for May will be a focal point, as will Tuesday's
inflation data out of the United States.  
    The U.S. dollar-Canadian dollar pairing is likely to be
tightly capped between C$1.08 and C$1.07, but a breakout above
C$1.08 could become the start of another leg higher, said Scott
Smith, senior market analyst at Cambridge Mercantile Group in
    That could see the pair creep up to the mid-C$1.09s, he
    The flight to safety sent Canadian government bond prices
mostly higher, with the benchmark 10-year up 27
Canadian cents to yield 2.136 percent, its lowest in more than a
    The two-year bucked the trend and was off 1 
Canadian cent to yield 1.085 percent. 

 (Editing by James Dalgleish)