CANADA FX DEBT-Loonie steady as market awaits U.S. shutdown news

* C$ at C$1.0396 vs US$, or 96.19 U.S. cents
    * Investors await resolution on U.S. budget impasse
    * Bond prices lower across the curve

    By Solarina Ho
    TORONTO, Oct 10 (Reuters) - The Canadian dollar was little
changed against the greenback on Thursday amid signs U.S.
lawmakers were making progress on a fiscal showdown that has had
markets fretting over the possibility of a U.S. default.
    Investors were also turning their attention to Canadian
employment data on Friday. On average, economists were expecting
10,000 new jobs created in September. 
    "It's certainly a volatile set of numbers ... We'll take our
cue from what kind of outlier number it is," said Matt Perrier,
a director of foreign exchange sales at BMO Capital Markets.
    In the meantime, Perrier said the currency consolidated
throughout the afternoon as investors assessed the situation in
    U.S. House of Representatives Republicans said they would
propose legislation for a short-term increase in the
government's borrowing authority to buy time for negotiations on
broader policy measures. 
    A budget impasse in Washington has led to a partial
government shutdown, now in its tenth day, and is bringing
lawmakers closer to a separate and more crucial mid-October
deadline to raise the debt ceiling to avoid a potential default.
    The Canadian dollar, which was outperforming many
of its counterparts, closed at C$1.0396 versus the greenback, or
96.19 U.S. cents, little changed from the previous session's
finish at C$1.0394, or 96.21 U.S. cents.
    Investors are also concerned that the government shutdown
will start to bite into economic growth, which could hurt
Canada, the largest trading partner with the United States.
    "The events as they unfold in Washington have really in many
respects been the major control over what's happening in the
foreign exchange landscape," said Jack Spitz, managing director
of foreign exchange at National Bank Financial in Toronto.
    While the loonie, as the Canadian dollar is colloquially
called, tends to be less volatile than other G10 currencies, an
agreement to temporarily raise the debt ceiling would be seen as
positive for the risk outlook, and would likely lead to a
strengthening of the Canadian dollar, said Spitz.
    At home, data showed prices for new homes in Canada remained
tame in August, rising just 0.1 percent. 
    Prices for Canadian government bonds were generally lower
across the maturity curve. The two-year bond slipped
2 Canadian cents to yield 1.208 percent, while the benchmark
10-year bond fell 16 Canadian cents to yield 2.596