CANADA FX DEBT-C$ strengthens after last week's rout, Fed eyed

* C$ at C$1.0448 vs US$, or 95.71 U.S. cents
    * Canada dollar consolidates after last week's slide
    * U.S. Federal Reserve policy meeting in focus
    * Canadian bond prices mixed across the curve

    By Leah Schnurr
    TORONTO, Oct 28 (Reuters) - The Canadian dollar strengthened
slightly against the greenback on Monday, recovering some of its
recent sharp drop, and as investors stayed cautious ahead of a
meeting of Federal Reserve policymakers later this week.
    The "loonie" hit a 1-1/2-month low on Friday, shedding 1.6
percent for the week in the wake of a policy shift from the Bank
of Canada. 
    Highlighting weaker-than-expected growth and inflation, the
central bank dropped any mention of eventual rate increases from
its latest policy statement, leading to expectations among
analysts that rates will stay low for longer. 
    The central bank has kept its key rate at 1 percent since
2010, and analysts said the removal of its rate-rise bias gives
its policy stance a more neutral tone.
    Investors also had their focus on the Federal Reserve's
two-day meeting, starting on Tuesday, though the U.S. central
bank was expected to hold the line on its economic stimulus
    The Fed surprised markets in September with its decision to
continue its bond-buying program at a $85 billion a month pace,
rather than trimming the amount. The Canadian dollar touched a
three-month high following that announcement but has weakened
    "We're basically just consolidating after last week," said
Scott Smith, senior market analyst at Cambridge Mercantile Group
in Calgary. 
    "The change in the Bank of Canada stance on interest rates
and the outlook for monetary policy in Canada has really trumped
that risk-on atmosphere in the 'loonie' that we got from the
delay in tapering."
    The Canadian dollar was at C$1.0448 versus the
greenback, or 95.71 U.S. cents, stronger than Friday's close of
C$1.0455, or 95.65 U.S. cents. 
    Baring any surprises, the Canada dollar is likely to trade
in a range between the low C$1.05 area and the high C$1.03
levels, said Smith.
    Also on the horizon this week is Canadian gross domestic
product for August, due on Thursday. 
    Canadian government bond prices were mixed  across the
maturity curve. The two-year bond was up 1 Canadian
cent to yield 1.083 percent, and the benchmark 10-year bond
 slipped 3 Canadian cents to yield 2.425 percent.