* Canadian dollar slightly higher, but rangebound
* Upcoming retail sales, inflation data in focus
* Bond prices flat to lower in quiet trading
TORONTO, July 21 (Reuters) - The Canadian dollar rose slightly against the U.S. dollar on Monday amid firm commodity prices and positive news on the merger and acquisition front, in lackluster trading ahead of key data due this week.
Domestic bond prices were flat to lower as positive equity markets eased the flight-to-quality bids for government debt.
At 9:44 a.m. (1344 GMT), the Canadian dollar was at C$1.0050 to the U.S. dollar, or 99.50 U.S. cents, up from C$1.0057 to the U.S. dollar, or 99.43 U.S. cents, at Friday's close.
Early trade in the Canadian dollar was subdued despite higher prices for major Canadian exports such as oil and gold.
"Canada looks like it's trapped ahead of the data," said Steve Butler, director of foreign exchange at Scotia Capital.
Retail sales data for May will be released Tuesday with inflation numbers for June due on Wednesday.
"(The Consumer Price Index) on Wednesday will be one of those headliners that we will all be looking at to see if things are taming a little bit on the inflation front, and with retail sales, certainly the central banks have to be a little bit concerned about growth," Butler said.
The Bank of Canada said in its Monetary Policy Report Update last week that soaring oil prices would lift headline inflation as high as 4.3 percent in early 2009. Core inflation, which strips out volatile food and energy prices, is expected to stay within the central bank's range of 1 to 3 percent.
With inflation and growth worries both on the radar, the Bank of Canada has indicated it will leave interest rates steady for the foreseeable future.
A positive boost for the Canadian dollar on Monday came from foreign takeovers of Canadian businesses, said Butler.
LS Power Equity Partners and Global Infrastructure Partners said on Monday they plan to buy wholesale power generator and marketer TransAlta Corpin a C$39-per-share, all-cash deal. As of mid-June, TransAlta had nearly 199 million shares outstanding, valuing the Calgary-based company at about C$7.75 billion.
That comes on the heels of an announcement last week from Royal Dutch Shellthat it was going to buy Duvernay Oil Corp for C$5.9 billion.
BONDS FLAT TO LOWER
Bond prices dipped slightly in lackluster trading as a rally in the equity market eased a recent safe-haven bid for government debt.
"Trading volumes have been very, very slow," said Sheldon Dong, fixed income analyst at TD Waterhouse Private Investment.
"Nothing right now has any interest rate implications because the central bank is on hold until at least September."
The overnight Canadian Libor ratewas 2.9467 percent.
Friday's CORRA ratewas 3.0011 percent, up from 2.9962 percent on Thursday. The Bank of Canada publishes the previous trading day's rate around 9 a.m. daily.
The two-year bond was flat at C$101.00 to yield 3.189 percent. The 10-year bond slid 17 Canadian cents to C$103.48 to yield 3.882 percent.
The yield spread between the two-year and 10-year bond was 64.0 basis points, up from 61.2 basis points.
The 30-year bond lost 2 Canadian cents to C$114.18 for a yield of 4.152 percent. In the United States, the 30-year treasury yielded 4.655 percent.
The three-month when-issued T-bill yielded 2.37 percent, unchanged from the previous close. (Editing by Bernadette Baum)
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