CANADA FX DEBT-C$ flat as investors look ahead to Fed meeting

* Canadian dollar at C$1.0640 or 93.98 U.S. cents
    * Bond prices higher across the maturity curve
    * Fed meeting in view next week

    By Leah Schnurr
    TORONTO, Dec 13 (Reuters) - The Canadian dollar was flat
against the greenback on Friday, with the currency expected to
stick to a trading range as investors were wary of taking large
bets ahead of next week's Federal Reserve policy-setting
    Investors were also continuing to parse Thursday's comments
from Bank of Canada Governor Stephen Poloz, who said the central
bank is likely to keep interest rates on hold "for quite some
time," dampening talk that it was edging closer to cutting rates
in order to combat low inflation. 
    The perception that the Bank of Canada is becoming more
dovish has weighed on the loonie since late October when the
central bank dropped its long-held rate hike bias. Since then,
the Canadian currency has lost more than 3 percent.
    Poloz on Thursday called that policy change a shift to
honesty rather than dovishness.
    "All in all, the Bank of Canada's view is fairly contained
and neutral in retrospect," said Dean Popplewell, chief currency
strategist at OANDA in Toronto. 
    The Canadian dollar was at C$1.0640 to the
greenback, or 93.98 U.S. cents, unchanged from Thursday's close.
    Markets will remain fixated on what the Fed will decide to
do at its two-day meeting next week, which runs from Dec. 17-18.
Investors are trying to gauge whether the central bank will
start to scale back its bond purchases next week or hold off
until the new year.
    Recent stronger-than-expected economic data and a budget
deal in Washington have increased speculation tapering could get
under way next week. The Fed is currently buying $85 billion in
bonds a month, which has been a major driver of global markets
this year. 
    A faster timetable for the Fed is seen as a negative for the
Canadian dollar as the move is expected to reduce risk appetite
and benefit the U.S. currency.
    Canadian government bond prices were up across the maturity
curve, with the two-year up half a Canadian cent to
yield 1.097 percent and the benchmark 10-year up 16
Canadian cents to yield 2.646 percent.