* C$ at C$0.9972 vs US$, or $1.0029
* Canada GDP slows in January
* U.S. data, euro zone hopes boost sentiment
* Bond prices mostly higher
By Jon Cook
TORONTO, March 30 (Reuters) - The Canadian dollar was little
changed against the U.S. currency on Friday after data that
showed the domestic economy slowed in January offset an
encouraging U.S. consumer spending report and a move by euro
zone leaders to boost the region's bailout fund.
After a sharp jump in December, Canadian economic growth
slowed in January to 0.1 percent as strength in manufacturing
and financial services was partially offset by a decline in
natural gas extraction, Statistics Canada said on Friday.
The Canadian dollar was unchanged on the news.
"That's what most economists expected and that's what is
embedded in expectations of the outcome for the first quarter,"
said Adam Cole, global head of foreign exchange strategy at
Royal Bank of Canada. "It's not really giving the market much
direction."
In the United States, consumer spending in February
increased by the most in seven months, even as income rose
modestly. That could prompt analysts to scale back expectations
of a sharp pullback in economic growth this quarter.
Traders also looked ahead to a key index of U.S.
manufacturing activity later in the day as a further gauge of
the recovery in Canada's largest trading partner.
"If we do start to see the U.S. data soften slightly it will
be bad news for the Canadian dollar," said Blake Jespersen,
managing director, foreign exchange sales.
At 9 a.m. (1300 GMT), the Canadian dollar stood at
C$0.9972 versus the U.S. dollar, or $1.0029, little changed from
Thursday's close at C$0.9967 against the U.S. currency, or
$1.0033.
Risk sentiment improved overnight after euro zone finance
ministers agreed on Friday on a temporary increase in the
capacity of their bailout funds to prevent a new flare-up of
Europe's sovereign debt crisis.
"You've seen a little bit better risk tone on the back of
that," said Jespersen.
The Canadian currency touched an overnight session high at
C$0.9953 against the greenback, or $1.0047, but Jespersen said
it was locked in an increasingly narrowing window that was
discouraging buyers.
"Our investors are choosing to play in other currency pairs
which actually move a little more," said Jespersen. "It seems to
run out of buyers as soon as it breaks C$0.99 ($1.01), and if we
do see that pop above parity we see a lot of corporate interest
from our Canadian clients to lock in U.S. dollar sales."
Canadian bond prices were mostly higher, with Canada's
2-year bond up 2 Canadian cents to yield 1.173
percent. The 10-year bond rose 14 Canadian cents to
yield 2.067 percent.