* C$ little changed at C$0.9939 vs US$, or $1.0061
* Bond prices ease slightly across the curve
By Claire Sibonney
TORONTO, Dec 4 (Reuters) - The Canadian dollar was little
changed in a tight range against the U.S. currency on Tuesday as
investors held off making any big bets ahead of the Bank of
Canada's interest rate decision later in the morning.
The central bank is expected to keep rates steady until the
fourth quarter of 2013 but markets will be listening to its
language closely for any indication of a shift in its slightly
hawkish bias.
Bank of Canada Governor Mark Carney, named last week as the
next head of the Bank of England, has been signaling a need to
raise the main policy rate since April, making the country the
only industrialized nation to lean toward a rate hike.
"I think the Bank of Canada will definitely be status quo
for the short term here until there's a new leader and even if
they do announce who the next governor is going to be, it's
still going to be a matter of sticking to the script that's been
set out over the past year," said Blake Jespersen, managing
director of foreign exchange sales at BMO Capital Markets.
Carney will stay at the Bank of Canada through May, and
starts at the Bank of England in July. He will serve a five-year
term, rather than the eight years that had been expected for the
next BoE governor.
At 8:05 a.m. (1505 GMT), the Canadian dollar was at
C$0.9939 versus the U.S. dollar, or $1.0061, compared with
C$0.9949, or $1.0051, at Monday's North American session close.
The Canadian dollar was trading in a narrow daily range of
just 20 points against the greenback between C$0.9935-C$0.9955.
The currency, which typically follows moves in global equity
and commodity markets, failed to take direction from broader
risk sentiment on Tuesday as investors focused on
Canada-specific drivers ahead of the central bank's 9 a.m. (1400
GMT) announcement.
Elsewhere, the euro hit a six-month high and European shares
and peripheral euro zone bonds added to recent gains Tuesday, as
optimism over Greece's plan to buy back debt and signs of
progress elsewhere in the bloc boosted sentiment.
Meanwhile, the price of oil - a key Canadian export -
slipped as weak manufacturing data and protracted U.S. budget
negotiations fanned concerns about the health of the global
economy.
Near term, Jespersen expected the Canadian dollar to hold
between C$0.9900-C$0.9980.
"I think as long as the U.S. continues to delay these
'fiscal cliff' talks and the closer we get to the (year-end)
deadline, I think that will start to cause the market some
concern and some stress ... but overall we're going to remain in
a fairly tight range for the Canadian dollar," he said.
Canadian bond prices edged lower across the curve, with the
two-year bond down half a Canadian cent to yield
1.064 percent, and the benchmark 10-year bond down 7
Canadian cents to yield 1.707 percent.