CANADA FX DEBT-C$ holds steady after sharp drop
* Canadian dollar at C$1.0678 or 93.65 U.S. cents * Bond prices higher across the maturity curve By Leah Schnurr TORONTO, July 8 (Reuters) - The Canadian dollar was little changed against the greenback on Tuesday, stabilizing after the previous session's sharp decline as a lack of domestic data on tap left the currency drifting. The loonie lost 0.3 percent on Monday, as it was driven lower by a disappointingly weak report on purchasing activity in June. Investors are also trying to gauge whether the Bank of Canada will stick to its neutral tone when it releases its monetary policy statement next week or whether a recent strong inflation report will force the central bank to alter its message. The main economic event this week will be Friday's employment report, but once that report is released, attention is likely to focus solely to the Bank of Canada's meeting on July 16, analysts say. "It's hard to break out of these ranges until we get through our employment report on Friday," said Mark Chandler, head of Canadian fixed income and currency strategy at Royal Bank of Canada in Toronto. "If we have a swing and a miss on our employment report, you could have an accumulation of decent (economic) evidence in the U.S. and our Bank likely to be cautious, so that wouldn't be a good prescription for the currency." The Canadian dollar was at C$1.0678 to the greenback, or 93.65 U.S. cents, nearly flat to Monday's close of C$1.0677, or 93.66 U.S. cents. Despite Monday's pullback, the loonie is still up about 2.5 percent since early June following a rally fueled by the firmer inflation data, higher oil prices and a better outlook for global growth. Canadian government bond prices were higher across the maturity curve, with the two-year up 4 Canadian cents to yield 1.113 percent and the benchmark 10-year up 30 Canadian cents to yield 2.268 percent. (Editing by Chizu Nomiyama)
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