* C$ at C$0.9670 vs US$, or $1.0341
* Bonds edge higher across curve
TORONTO, May 9 (Reuters) - The Canadian dollar was little changed against the greenback on Monday morning, caught between renewed fears about European sovereign debt and a rebound in beaten down commodity prices.
European shares extended falls in afternoon trade after ratings agency Standard & Poor's further downgraded Greece's credit rating to B from BB-minus. [MKTS/GLOB]
"The disconnect between the rising price of energy and metals and the drop in European equity markets, the currency market itself is biased at the moment for a risk bid by virtue of the weakness of the U.S. dollar and Japanese yen," said Jack Spitz, managing director of foreign exchange at National Bank Financial. "It's still undecided in terms of where to take currency valuations given last Thursday and Friday's massive short squeeze in the euro."
Oil rebounded by more than $4, helped by a weaker dollar as the euro strengthened and bargain hunting by traders, while gold climbed back above $1,500 an ounce and silver rallied more than 6 percent. [O/R] [GOL/]
"There have been bounces on some of those markets but the U.S. dollar itself is prime for a continued short squeeze so we could be seeing more U.S. dollar gains which could ultimately reflect itself in more bids in dollar/Canada as well," added Spitz.
At 9:26 a.m. (1326 GMT), the Canadian dollar stood at C$0.9670 to the U.S. dollar, or $1.0341, exactly the same level as Friday's North American session close.
Spitz said near-term support for the Canadian dollar was seen up to C$0.9720.
With no major data on Monday, Canadian housing starts -- which unexpectedly slipped 3.1 percent in April -- weighed slightly. [ID:nN09216730]
A slew of economic data from China, European inflation figures and North American trade figures later in the week is expected to provide further direction.
Canadian bond prices picked up across the curve, reversing an earlier decline.
The two-year Canadian government bondwas up 2 Canadian cents to yield 1.655 percent, while the 10-year bond added 6 Canadian cents to yield 3.188 percent. (Reporting by Claire Sibonney; Editing by Theodore d'Afflisio)
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