* C$ at C$1.0509 vs US$, or 95.16 U.S. cents * Keystone approval on radar after Obama comments * China's central bank moves to allay banking crisis fears * Bond prices slip By Alastair Sharp TORONTO, June 25 (Reuters) - The Canadian dollar softened against the greenback on Tuesday but did not break new ground after weakening some 3 percent in recent sessions following investor worries about when the U.S. Federal Reserve will rein in its monetary stimulus. The currency saw some late afternoon volatility after U.S. President Barack Obama said he would block a proposed oil pipeline from Canada if it added to carbon pollution. "The knee jerk reaction was that this was going to make it less likely for Keystone approval and that that's a negative for the Canadian dollar, but the market is starting to rethink that," said Adam Button, currency analyst at ForexLive, who predicted eventual approval of the Keystone pipeline could boost the Canadian currency by two cents. U.S. data on Tuesday showed strong gains in business spending plans and orders for manufactured goods last month and the largest annual rise in house prices in seven years in April. But the greenback did not appreciate meaningfully against other major currencies, including the Canadian dollar, after several days of oversized gains last week. "The economic data today was excellent news for the U.S. dollar yet it struggled to gain, and in light of that traders are coming in and taking profits against it," Button said. The Canadian dollar ended the session at C$1.0509 versus the U.S. dollar, or 95.16 U.S. cents, compared to Monday's finish at C$1.0486, or 95.37 U.S. cents. The currency had touched C$1.0556 on Monday, its weakest level since Oct. 5, 2011. In China, fears of a banking crisis were allayed after the People's Bank of China calmed some of those concerns overnight, helping world equities recoup some of their recent losses. U.S. Treasuries finished the day lower in choppy trade. "It's been a volatile few days - that's a bit of an understatement. I think it's generally a situation where the Canadian dollar is taking its cues from global risk sentiment and from events abroad," said Mazen Issa, macro strategist at TD Securities. "In terms of today's trading, it has been holding fairly steady." Canadian government debt prices slipped across the maturity curve, with the two-year bond losing 1.5 Canadian cents to yield 1.253 percent. The benchmark 10-year bond shed 32 Canadian cents to yield 2.527 percent.