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* C$ at C$1.0223 vs US$, or 97.82 U.S. cents * Bailout plan for Cyprus will tax bank deposits * Foreigners acquire C$13.34 bln in Canadian securities in Jan * Bond prices higher across curve By Solarina Ho TORONTO, March 18 (Reuters) - The Canadian dollar softened against its U.S. counterpart on Monday as investors sold riskier assets after news that a bailout plan for Cyprus that will tax bank deposits in exchange for a 10 billion euro ($13 billion) bailout. The weekend announcement broke with previous EU practice that depositors' savings were sacrosanct. Cypriots emptied cash machines, feeding worry about possible bank runs in larger states that are possible bailout contenders. The Canadian dollar's retreat was modest relative to the overall tone of the market, analysts said, noting it pared heavier overnight losses. "Maybe we're getting a bit of a safe haven bid on the back of weakness in Europe ... and Canada is still seen as a AAA in a relatively safe country. You saw that to some extent in the capital flow numbers this morning," said Benjamin Reitzes, senior economist and foreign exchange strategist at BMO Capital Markets. Statistics Canada reported slightly better securities transaction data, which saw foreigners acquire C$13.34 billion ($13.08 billion) of Canadian securities in January. "That may have given a little bit more additional impetus for Canada to strengthen somewhat, but we still think in the near term, the Canadian dollar still has room to weaken a little bit further over the next month or two," said Reitzes. The Canadian dollar ended the North American trading session trading at C$1.0223 against the greenback, or 97.82 U.S. cents, weaker than Friday's finish at C$1.0193, or 98.11 U.S. cents. It had touched C$1.0251, or 97.55 U.S. cents earlier on Monday. "We saw some strong inflows in January. The numbers are not usually anything that moves the market to any significant degree, so I don't think it's anything that's probably going to overshadow the broader focus on risk," said Shaun Osborne, chief currency strategist at TD Securities. Osborne noted the stronger correlation between the Canadian dollar and risk assets again. "Those correlations did really weaken off quite dramatically at the start of the year. The focus was really on domestic developments. But it's probably moving back toward a focus on external issues as a potential driver for the Canadian dollar." The Canadian dollar was mixed against most major foreign currencies, underperforming against its commodities-linked counterparts of the New Zealand and Australian dollars. It held firm against the British pound . Canadian manufacturing sales, wholesale trade and retail sales data are next on the radar and all three are expected to be positive, said Reitzes. "But we've had continued downside surprises on Canadian numbers, so until we see these positive numbers - I'll believe when I see it," he added. The price of Canadian government debt was higher across the curve, with the two-year bond up 1 Canadian cents to yield 0.984 percent, while the benchmark 10-year bond climbed 29 Canadian cents to yield 1.864 percent.