* C$ at C$1.0172 vs US$, or 98.31 U.S. cents * Euro zone economy contracts; U.S. economic recovery on track * Manufacturing sales sag in March; home sales rise in April * U.S. and Canadian CPI in focus By Solarina Ho TORONTO, May 15 (Reuters) - The Canadian dollar held steady against the U.S. dollar and outperformed against most other currencies on a slew of mixed economic data. Canadian manufacturing sales sagged in March following an unexpected surge in February, reverting to a trend of lackluster performance more in line with modest economic growth, according to Statistics Canada data. Meanwhile, Canadian home sales rose in April, the second straight monthly gain, as spring home buying bolstered hopes Canada's housing market will manage a soft landing. Investors took a more cautious look at the global economy after European data which showed the euro zone economy contracted more than expected in the first quarter and saw France slide back into recession. South of the border, a decent showing from the U.S. economy has helped its currency make solid gains against key rivals and underpinned expectations the Federal Reserve may wind down its asset-purchasing program by the end of the year. "It's more or a less it's a wash. It's a broader-based (U.S.) dollar appetite at the moment," said Darcy Browne, Managing Director, Capital Markets Trading at CIBC. "I think most people have the mindset now that you should buy on (U.S.) dollar dips. As it pertains to USD/CAD, Canada is still very much range bound." The loonie, as Canada's currency is colloquially known, finished trading at C$1.0172 to the greenback, or 98.31 U.S. cents, little changed from Tuesday's North American close at C$1.0170, or 98.33 U.S. cents. Earlier in the session, the Canadian dollar had weakened to C$1.0220. "To be honest, I'd characterize the move today more as dollar strength than CAD weakness," said Adam Cole, the global head of currency strategy at Royal Bank of Canada. "It's a parallel move against most of the majors, rather than being anything specific to CAD." Inflation data from the United States on Thursday and Canada on Friday are the next main focus for the market. The Bank of Canada has ratcheted down growth expectations in recent months and economists polled by Reuters are expecting no growth for the month of April. "If there was to be a surprise, it would be toward better growth than weaker at this point. Anything weaker would probably push us back up to C$1.0250, said CIBC's Browne. Prices for Canadian government bonds rose across the curve, with the two-year bond up 2.1 Canadian cent to yield 1.028 percent and the benchmark 10-year bond rising 32 Canadian cents to yield 1.922 percent.
