* C$ closes at C$0.9771 vs US$; rangebound ahead of BoC
* Bond prices little changed
* Volume light with U.S., UK markets closed
* Q1 GDP strongest in a year, slightly below consensus (Updates to close, adds details, quotes)
By Claire Sibonney
TORONTO, May 30 (Reuters) - Canada's dollar closed little changed on Monday as growth data offered few surprises ahead of an interest rate decision on Tuesday in which the central bank is expected to stay on hold.
Canada's economy gathered speed in the first quarter, expanding at its fastest pace in a year, as businesses ramped up investment and rebuilt inventories, though economists warned the growth spurt would not last long. [ID:nN30235278]
Growth came in at an annualized rate of 3.9 percent in the quarter, slightly below Bank of Canada and market expectations.
Still, the central bank is widely anticipated to hold its benchmark interest rate at 1.0 percent and keep rates steady until the third quarter as growth slows. [ID:nN27269933]
"Somewhat disappointing, though obviously backwards looking and still a strong print," said Camilla Sutton, chief currency strategist at Scotia Capital.
"What matters from here is really what transpires, I think most people have factored in that Q2 is going to be relatively weak just based on supply chain disruptions," she added, noting the the earthquake in Japan and its negative impact on the auto industry in particular.
The Canadian dollar initially firmed on the data, but quickly pared those gains. Volumes were light with the U.S. and UK traders on holiday.
The currency CAD=D4 ended the North American session at C$0.9771 to the U.S. dollar, or $1.0234, nearly unchanged from Friday's close at C$0.9773 or $1.0232.
Looking ahead to the next session, analysts will be fixed on any nuances in language from the Bank of Canada statement.
"Essentially we expect to see some recognition that global headwinds have increased and that inflation in Canada might be slightly softer," added Sutton. "But all in all we expect to have a fairly neutral statement, very similar to the last one."
If the bank statement is more hawkish than expected it could prompt dealers to raise their bets for future rate hikes. This would likely push up the Canadian dollar and weigh on interest-rate sensitive T-bill and bond prices.
If the bank produces a statement similar to the one in April -- with no signal it plans raise rates soon -- it could further weigh on the currency and help underpin bond prices.
The day's range held between C$0.9752-C$0.9790, close to where it's stood for the past week of uninspiring moves.
Sutton was hopeful that Tuesday's Bank of Canada statement could drive more momentum in the currency, noting a break through the 100-day moving average around C$0.9755 would be important for Canadian-dollar bulls.
"If we can close below there that would be somewhat encouraging and put us more in line with most of the other currencies that are trading between their 50- and 100-day moving averages," she said.
Flat commodity prices did little to drive direction for the resource-based currency. [O/R] [GOL/] [MET/L]
With no direction from U.S. Treasuries, Canadian bond prices were little changed. Canada's two-year bond CA2YT=RR was up 1 Canadian cent to yield 1.500 percent, while the 10-year bond CA10YT=RR was down 3 Canadian cents to yield 3.066 percent. (Editing by Jeffrey Hodgson)