* C$ rises to 97.48 U.S. cents
* Bonds prices drift higher
TORONTO, Oct 28 (Reuters) - The Canadian dollar firmed against its U.S. counterpart on Thursday with the greenback giving back some of the gains made earlier this week as a short-covering rally fizzled and U.S. Treasury yields fell.
Renewing pressure on the U.S. currency, the New York Federal Reserve has surveyed bond dealers and investors over the size and impact of a quantitative easing program, including scenarios ranging from zero up to $1 trillion, Bloomberg news reported. [ID:nLDE69R15M]
A Reuters poll showed Wall Street analysts expect the Fed to buy between $80 billion and $100 billion worth of assets per month under a new program widely expected to be unveiled on Nov. 3. [FED/R]
"What you're seeing now is a little risk back on generally ... you're seeing euro bouncing off its lows significantly and Canada is going along with it," said Firas Askari, head of foreign exchange trading at BMO Capital Markets.
Earlier this week, investors trimmed extreme short U.S. dollar positions as speculation the Fed might announce plans to buy more assets to stimulate the economy next week turned into a guessing game about how much they would purchase.
"There's going to be massive disappointment if there's no quantitative easing next week," added Askari. "There will be a significant (U.S.) dollar rally but there will be carnage in equity markets."
At 8:00 a.m. (1200 GMT), the Canadian dollarstood at C$1.0258 to the U.S. dollar, or 97.48 U.S. cents, up slightly from Wednesday's close at C$1.0287 to the U.S. dollar, or 97.21 U.S. cents.
Askari sees the next buying opportunity for the Canadian dollar at the U.S. dollar resistance level of C$1.0344-45, close to the 100-day and 200-day moving averages.
He said near-term support for the greenback lies at C$1.0190.
On the data front on Wednesday, investors will be looking to weekly U.S. jobless claims for further direction.
Canadian government bond prices strengthened, tracking U.S. Treasuries higher, but the market remained choppy as investors recalibrated U.S. easing expectations. [US/]
The two-year bondrose 2 Canadian cents to yield 1.447 percent, while the 10-year bond added 13 Canadian cents to yield 2.878 percent. (Reporting by Claire Sibonney; Editing by Theodore d'Afflisio)
Our Standards: The Thomson Reuters Trust Principles.