* C$ falls about 1 U.S. cent to 94.82 U.S. cents
* Canada to suspend Parliament until after Olympics
* Bond prices flat (Updates with details)
TORONTO, Dec 30 (Reuters) - The Canadian dollar fell versus a broadly stronger U.S. currency on Wednesday, backing further away from a 2-1/2 month high hit in the previous session in illiquid conditions.
The currency held lower after news that Canadian Prime Minister Stephen Harper is planning to have Parliament suspended until early March. [ID:nTOD006123]
"The currency has had a few adventures across the day, but the political side of it doesn't seem to be the dominant focus. The U.S. dollar is showing some strength today." said Eric Lascelles, chief economics and rates strategist at TD Securities.
At 1:35 p.m. (1735 GMT), the Canadian dollar was at C$1.0546 to the U.S. dollar, or 94.82 U.S. cents, down from C$1.0438 to the U.S. dollar, or 95.80 U.S. cents, at Tuesday's close. Earlier it had fallen to a one-week low at 94.53 U.S. cents.
The greenback gained across the board on Wednesday, hitting its highest since late September against the Japanese yen as it benefited from year-end flows in thin trade and from the view the U.S. economy is on the road to recovery. [FRX/]
After a technical point was triggered in the previous session, market players took the Canadian currency to a high not seen since Oct. 20 at 96.47 U.S. cents, but the move was short-lived.
"It was a little bit overdone. Expectations as to Canada holding better levels sub-C$1.04 is probably unrealistic at this point in time. There's not enough participants in the market to support those levels just yet," said C.J. Gavsie, managing director of foreign exchange sales at BMO Capital Markets.
"We do believe going forward into early to mid-January we will retest those levels. If we do see them by the end of this week it's only going to be on sharp flows that are probably going to recoil."
For the time being, the C$1.0450-C$1.05 range will likely be a bit more of a "natural" level, he added. Thin trading conditions will likely make for further exaggerated moves.
With no major Canadian economic data on tap this week, Canadian bond prices were little changed, much like their U.S. counterparts after a seven-year U.S. bond auction. It was the last leg of this week's three U.S. debt offerings totaling $118 billion.
"You had a pretty decent auction in the U.S. but there's nothing obviously driving markets at this time," said Lascelles.
The two-year Canadian government bond CA2YT=RR was off 1 Canadian cent at C$99.64 to yield 1.441 percent, while the 10-year bond CA10YT=RR fell 8 Canadian cents to C$101.02 to yield 3.621 percent. (Reporting by Ka Yan Ng; Editing by Jeffrey Hodgson)