* C$ finishes up at 98.42 U.S. cents after late rally
* Bond prices fall on U.S. data, disappointing auction
By Ka Yan Ng
TORONTO, March 23 (Reuters) - The Canadian dollar rallied late in Tuesday's session to end higher against the U.S. currency after three down days, but it did not show strong conviction ahead of a heavy schedule of central bank events.
The Canadian dollar moved in a narrower range than in the previous session as market players were hesitant to take on large positions ahead of Wednesday's full news slate, which includes Bank of Canada Governor Mark Carney as well as several U.S. Federal Reserve speakers.
Market players also remained cautious over Greece's debt woes ahead of a European Union summit on March 25-26.
The currency finished at C$1.0161 to the U.S. dollar, or 98.42 U.S. cents, up from Monday's finish at C$1.0188 to the U.S. dollar, or 98.15 U.S. cents.
"There will be a ton of central banker risk in the market tomorrow," said Camilla Sutton, currency strategist at Scotia Capital.
"Right now, the markets are going to be uneasy moving substantially out of their recent ranges," Sutton said. "I think that what we need are either some developments from Europe or Canada-specific (news) from Carney tomorrow to really have us move either closer to parity or further away from it."
The fundamental picture for the Canadian dollar remains positive, market watchers say, but the currency has been rattled by worries over European sovereign debt levels, prompting safe haven flows to the U.S. dollar.
Earlier on Tuesday, the Canadian dollar sagged against the greenback, pressured by weak oil prices and the firmer U.S. dollar. But prices for crude, a major Canadian export, rallied slightly higher to settle near $82 a barrel, and helped lift the Canadian dollar.
The currency rose to near a 20-month high last week, sparking a flurry of debate over when parity with the U.S. dollar might arrive.
"People are still watching parity very closely but we need to see some momentum and some of the short dollar/Canada positions rebuild themselves after being stopped out through this last run-up into the low C$1.02s," said C.J. Gavsie, managing director of foreign exchange sales at BMO Capital Markets.
BOND PRICES
Bond prices were lower across the curve, in line with the big U.S. Treasury market, where prices eased after the two-year note auction disappointed and firmer stocks pushed safe haven bids aside.
Data showing U.S. existing homes sales fell last month, but were not as weak as forecast, also pressured bonds.
The two-year government bond
Canadian bonds were mixed against their U.S. counterparts. The difference between 10-year yields narrowed 1 basis point to 21.7 basis points. (Additional reporting by Jennifer Kwan; editing by Rob Wilson)