CANADA FX DEBT-C$ firms as market braces for economic, central bank news
* Canadian dollar at C$1.1025 or 90.70 U.S. cents * Bond prices lower across the maturity curve (Adds details on market activity, quotes, updates prices) By Leah Schnurr TORONTO, April 28 (Reuters) - The Canadian dollar firmed against the greenback on Monday, though gains were slight as investors kept an eye on tensions in Ukraine and geared up for a busy week for economic data and central bank policy. The loonie has been trading mostly sideways in recent sessions, hovering around the technically important C$1.10 level as investors weigh modestly improving domestic economic data against a still-neutral Bank of Canada. "It's been overly quiet, not just today, but over the past week," said Greg Moore, senior currency strategist at Royal Bank of Canada in Toronto. "U.S. dollar-Canadian dollar really hasn't been shaken from this very tight trading range that it's been in for six or seven days now." New sanctions were announced on Monday against allies of Russian President Vladimir Putin, a move that Moscow denounced as "Cold War" tactics. At the same time, pro-Moscow rebels were holding a group of German and other military observers for a fourth day. These developments limited that market's risk appetite early in the session, though Moore said the fact that there wasn't a stronger reaction suggests the market is showing some fatigue over the headlines. The Canadian dollar ended the North American session at C$1.1025 to the greenback, or 90.70 U.S. cents, slightly stronger than Friday's close of C$1.1036, or 90.61 U.S. cents. Investors will get a chance to evaluate the Bank of Canada's policy stance when central bank officials testify on Parliament Hill on Tuesday and Wednesday. Governor Stephen Poloz reiterated last week that the central bank's next move on rates could be either up or down. "The big thing whenever Poloz is speaking now is whether he changes his tone or stance in terms of policy," said Scott Smith, senior market analyst at Cambridge Mercantile Group in Calgary. "As of right now, the Bank of Canada is officially neutral on interest rates but when Poloz speaks, he usually tends to take the dovish side of neutral. (In) a lot of his undertones, he does reiterate his cautious optimism on the Canadian economy and what needs to happen in order to get us through this trying period." Markets will also be focused on a policy-setting meeting on Tuesday and Wednesday of the U.S. Federal Reserve, which is set to continue winding down its stimulus program. The Canadian dollar could also take direction from a slew of U.S. economic data this week, culminating with the April unemployment report at the end of the week. At home, investors will get Canadian monthly gross domestic product data on Wednesday. "My bias is that the U.S. side of the equation should factor in a little bit more strongly to the currency reaction," Moore said. Canada issued its first ultra long-term 50-year bond on Monday, the Department of Finance said, a move that will let the government capitalize on the current low interest rate environment. Canadian government bond prices were lower across the maturity curve, with the two-year off 2 Canadian cents to yield 1.077 percent, and the benchmark 10-year down 34 Canadian cents to yield 2.447 percent. (Editing by Peter Galloway)
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