CANADA FX DEBT-C$ slips as Fed meeting in focus

* C$ at C$1.0333 vs US$ or 96.78 U.S. cents
    * Fed seen cutting bond-buying by $10 billion at next week's
    * Japanese paper says Lawrence Summers soon named Fed chief
    * Bond prices rise across curve

    By Solarina Ho
    TORONTO, Sept 13 (Reuters) - The Canadian dollar eased
marginally on Friday against its U.S. counterpart as investors
positioned themselves ahead of next week's Federal Reserve
meeting, where the Fed is widely expected to announce a modest
scale-back of its stimulus program.
    Following last Friday's weaker than expected U.S. non-farm
payrolls data, many traders and analysts expect the U.S. central
bank to announce a modest $10 billion reduction in its $85
billion monthly bond-buying program. 
    However, the uncertainty surrounding the Fed was further
fueled by a Japanese newspaper report that said Lawrence Summers
was tipped to replace Ben Bernanke as the next chief of the
Federal Reserve. 
    "The Nikkei article about Summers being the next Fed
chairmen lifted the (U.S.) dollar across the board. The movement
against CAD was really small," said Greg Anderson, global head
of foreign exchange strategy for BMO Capital Markets in New
    "We're stuck until we get the Fed decision next Wednesday.
That could easily move us one to two big figures, depending on
the outcome. And I think everybody just wants to square up and
stay neutral heading into that event."
    The Canadian dollar was trading at C$1.0333 versus
the U.S. dollar, or 96.78 U.S. cents at 9:13 a.m. (1313 GMT),
just a few basis points away from Thursday's North American
close at C$1.0325, or 96.85 U.S. cents.
    The Canadian dollar, underperforming against most of its
currency counterparts except for the Australian dollar
, was not expected to trade beyond the day's highs and
lows of around C$1.0320 and C$1.0350, said Anderson.
    Prices for Canadian government bonds were higher across the
maturity curve, with the two-year bond up 1 Canadian
cent to yield 1.280 percent and the benchmark 10-year bond
 rising 14 Canadian cents to yield 2.765 percent.