CANADA FX DEBT-C$ little changed after string of gains
* Canadian dollar at C$1.0729 or 93.21 U.S. cents * Bond prices higher across the maturity curve By Leah Schnurr TORONTO, June 24 (Reuters) - The Canadian dollar was little changed against the greenback on Tuesday, hovering just below a 5-1/2-month high as a lack of domestic economic data on tap this week left investors searching for catalysts. The loonie has gained in five out of the previous six sessions, partly fueled by data at the end of last week that showed a surprisingly strong rise in Canadian inflation and robust retail sales. The increase in May's annual inflation rate could put pressure on the Bank of Canada to alter the neutral stance it has held since last October as it has cited concerns about the low inflation environment. Analysts say further significant gains in the Canadian dollar could be difficult without a change in tone from the central bank. Still, a shift from the Bank of Canada is not expected in the immediate term. "Inflation pushing above 2 percent does make it hard for the Bank of Canada to be in a truly neutral stance, (which means) rate cuts as equal as rate hikes," said Don Mikolich, executive director of foreign exchange sales at CIBC World Markets in Toronto. While the market sees the possibility of a rate cut as increasingly unlikely, the central bank will still be cautious not to sound too aggressive, said Mikolich. "I don't think the bank is keen - especially now with the Canadian dollar strengthening - to switch to a more hawkish stance, which would see the Canadian dollar strengthen and defeat the gains on the export sector that they're hoping to see continue," he said. The Canadian dollar was at C$1.0729 to the greenback, or 93.21 U.S. cents, a tad weaker than Monday's close of C$1.0726, or 93.23 U.S. cents. The currency hit a high of C$1.0716 in the overnight session, its highest level since the start of the year. Canadian government bond prices were higher across the maturity curve, with the two-year up 2 Canadian cents to yield 1.133 percent and the benchmark 10-year up 28-1/2 Canadian cents to yield 2.304 percent. (Editing by W Simon)
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