TORONTO (Reuters) - The Canadian dollar softened against its US counterpart yesterday on lingering jitters over the fraud case against Goldman Sachs, but the currency moved in a narrow range a day ahead of the Bank of Canada's rate announcement.

All 12 of Canada's primary dealers surveyed last week expect the central bank to hold rates steady today. But market players are hesitant to make big moves one way or the other before getting a fresh sense of the bank's direction, and will closely scrutinize its accompanying policy statement for hints of timing on the next rate hike.

The bank has conditionally pledged to keep its key rate at its current ultra-low 0.25 percent level until the end of June so long as inflation remains tame.

"The (Bank of Canada) is a factor that is keeping it in a range a little bit here," said Camilla Sutton, a currency strategist at Scotia Capital.

The Canadian dollar finished at C$1.0148 to the US dollar, or 98.54 US cents, down from Friday's finish at C$1.0132 to the US dollar, or 98.70 US cents.

A likely scenario today is the Bank of Canada will leave the door open for a rate hike in June or July, market watchers say.

"The prospect of interest rates coming sooner could provide a bit of a lift for the loonie because investors are drawn to high interest rates," said Paul Ferley, assistant chief economist at Royal Bank of Canada. On the flip side, any hint the bank will maintain its pledge may cause the Canadian currency to droop.

"You could get a little bit more of a down drift in the C$, although my sense is the majority of opinion is still for a move in July, so I think comments confirming that would probably have less of an impact on the currency," said Mr. Ferley.

Earlier in the day, the Canadian currency fell as low as C$1.0216 to the US dollar, or 97.89 US cents, its lowest level since March 30, as investors scampered to traditional safe-haven assets.

Financial markets were hit by uncertainty and a new round of risk-aversion after the US Securities and Exchange Commission charged Goldman Sachs Group with fraud on Friday.

As well, oil prices retreated, in part due to flying restrictions in Europe cutting jet fuel demand, adding pressure to the commodity-linked currency.

Canadian bond prices were slightly higher, following moves in the US Treasury market, where prices got a lift from the fallout from fraud charges against Goldman Sachs.

"You're just getting people getting a bit cautious. The trend globally is sort of spilling over into Canadian markets," said RBC's Mr. Ferley.

The two-year government bond edged seven Canadian cents higher at C$99.39 to yield 1.834 percent, while the 10-year bond was up 25 Canadian cents higher at C$100.75 to yield 3.653 percent.

Canadian government bonds mostly outperformed US issues, with the two-year yield 85 basis points above its US counterpart, compared with around 91 basis points the previous session.

Elsewhere, Ontario added C$750 million of 10-year bonds in a reopening of an existing issue, according to a term sheet seen by Reuters yesterday.