* C$ edges up to C$0.9683 to the U.S. dollar, or $1.0327
* Trade is choppy in small C$0.9667-C$0.9698 range
* Bonds little changed
TORONTO, June 1 (Reuters) - Canada's dollar held in a muted trading range against the U.S. currency on Wednesday morning as market players reacted to weakening factory data in Europe and Asia.
The surveys for May on Wednesday fed concerns that the world's main economic engines are cooling fast as richer countries curtail orders. [ID:nLDE7500VU]
Trading between C$0.9667-C$0.9698 in early dealings, the currency is expected to see further consolidation ahead of Friday's U.S. non-farm payrolls report for May, analysts said.
"The price action in dollar/Canada was a minimum range of 30-points, but a fair bit of choppiness and volatility in recognition of the data beats and misses elsewhere," said Jack Spitz, managing director of foreign exchange at National Bank Financial.
Purchasing managers indexes, measuring the activities of thousands of factories across the world, sank to multi-month lows in China and Europe, where even regional pacesetters France and Germany showed fresh signs of sagging.
Investors were also assessing the landscape a day after the currency zoomed to its highest level in more than a week on the back of a central bank statement that was more hawkish than expected. [ID:nN31112740]
The move finally pushed the currency out of its tight C$0.9735-C$0.9817 range recently, and Spitz said C$0.9650, the 50-day moving average, now represented initial decent support.
Canadian government bonds were little changed, taking a breather after a steep sell-off in the previous session on changing expectations on the outlook for Canadian interest rates.
Overnight index swaps, which trade based on expectations for the central bank interest rate, now show investors have increased the odds of monetary policy tightening in September, October and December. July 19, the next policy setting date, is seen as a remote possibility for the central bank to resume raising interest rates. BOCWATCH
Primary dealers, however, are far more convinced of rate hikes this year than the swaps curve suggests. A Reuters survey of dealers -- the institutions that deal directly with the central bank as it carries out monetary policy -- found September was the most likely starting point for the Bank of Canada's next phase of interest rate increases. [CA/POLL]
At 8:15 a.m. (1215 GMT), the Canadian dollar CAD=D4 was at C$0.9683 to the U.S. dollar, or $1.0327, up a touch from C$0.9686 to the U.S. dollar, or $1.0324, at Tuesday's close.
Canada's two-year bond CA2YT=RR dipped 1 Canadian cent to yield 1.543 percent, while the 10-year bond CA10YT=RR gained 12 Canadian cents to yield 3.063 percent.
The Bank of Canada will auction C$700 million in 30-year real return auctions later in the session. (Reporting by Ka Yan Ng; Editing by Padraic Cassidy)