CANADA FX DEBT-C$ steady but pressured by U.S. inflation data

* Canadian dollar at C$1.0736 or 93.14 U.S. cents
    * Bond prices mixed, 10-year yield around 1-year low

    By Leah Schnurr
    TORONTO, July 22 (Reuters) - The Canadian dollar was little
changed against the greenback on Tuesday as a rise in U.S.
inflation put pressure on the loonie, offsetting the
re-emergence of risk appetite in global markets.
    Without any domestic economic data on tap until Wednesday's
retail sales figures for May, the Canadian dollar was expected
to trade in a narrow range.
    Data showed the U.S. consumer price index increased 0.3
percent in June, helping to lift the greenback 0.2 percent
against a basket of currencies to the detriment of the
    Sentiment in financial markets around the world turned more
optimistic on Tuesday after a spike in tensions in Ukraine and
the Middle East on Monday had sent investors looking for safe
    Investors, however, were still keeping a close eye on
geopolitical risks after European Union foreign ministers
threatened Russia with harsher sanctions over Ukraine, and
Israel said no ceasefire was near as it hit targets across the
Gaza Strip.  
    "It's going to be a relatively quiet session, still looking
at the geopolitical situation involving the Middle East and
Ukraine and watching for news headlines stemming from those
ongoing situations," said Martin Schwerdtfeger, FX strategist at
TD Securities in Toronto.
    The Canadian dollar was at C$1.0736 to the
greenback, or 93.14 U.S. cents, slightly weaker than Monday's
close of C$1.0730, or 93.20 U.S. cents.
    The loonie rallied 1.6 percent through June but has given
back about a half a percent so far this month. A disappointing
jobs report and a central bank that has firmly retained its
neutral stance have helped to sap some of the momentum from the
    Canadian government bond prices were mixed across the
maturity curve, with the two-year up half a Canadian
cent to yield 1.083 percent. The benchmark 10-year 
was unchanged, leaving the yield to hover around a more than
one-year low at 2.137 percent.

 (Editing by Peter Galloway)