* C$ ends slightly higher at 97.40 U.S. cents
* Eyes on U.S. Federal Reserve meeting Tuesday
* Bond prices largely flat across curve
(Adds details, quotes)
By Jennifer Kwan
TORONTO, Aug 9 (Reuters) - The Canadian dollar was a touch
higher against its U.S. counterpart on Monday, supported by
firm equity and oil prices, but was seen remaining in a tight
range as investors awaited the U.S. Federal Reserve's decision
and commentary on interest rates on Tuesday.
The U.S. central bank, while widely expected to renew its
vow to keep interest rates near zero for an extended period,
may indicate it is prepared to print more money to support the
"Flow is thin as one would expect on a summertime day ahead
of a Fed meeting tomorrow. There is anticipation in terms of
quantitative easing or the suggestion that perhaps it is likely
to reintroduce it," said Jack Spitz, managing director of
foreign exchange at National Bank Financial.
"The debate is with respect to quantitative easing and
whether the Fed makes reference to it in the communique ...
It's really all about guidance."
The Canadian dollar CAD=D4 finished at C$1.0267 to the
U.S. dollar, or 97.40 U.S. cents, up slightly from Friday's
close of C$1.0279 to the U.S. dollar, or 97.29 U.S. cents.
The currency got a boost from firmness in North American
equity markets, which rose on speculation the Fed may move to
stimulate the sluggish U.S. economy, and on strength in the
price of oil, a key Canadian export, which climbed above $81 a
barrel. [.TO] [.N] [O/R]
"The market is still looking to see no change," said Jon
Gencher, director of foreign exchange sales at BMO Capital
Markets, referring to U.S. interest rates.
"Anything the market is going to be looking for is
basically what they have to say with regard to the outlook."
Spitz said the market was watching for technical levels at
C$1.0145. As well, key levels will be the 90-day moving average
of C$1.0322 to the U.S. dollar, and the 200-day moving average
of C$1.04 to the U.S. dollar.
With no major data on Monday to offer direction, Canadian
bond prices were largely flat, said Kam Bath, fixed income
strategist at RBC Capital Markets.
Analysts also said bonds were slightly softer on unwinding
after a big rally on Friday when doubts about the economic
recovery prompted investors to embrace the safety of government
"There's just not much direction today. We had a bit of a
move on Friday so maybe it's exhaustion," said Bath.
The two-year bond CA2YT=RR drooped 1 Canadian cent to
yield 1.445 percent, while the 10-year bond CA10YT=RR was
unchanged to yield 3.075 percent.
Canadian bonds mostly outperformed U.S. Treasury issues
across the curve. The Canadian 2-year bond CA2YT=RR was 90
basis points above the U.S. 2-year yield, compared with about
93 basis points above on Friday.
(Additional reporting by John McCrank; editing by Rob Wilson)