By Karen Johnson Of DOW JONES NEWSWIRES TORONTO (Dow Jones)--The Canadian dollar was holding steady against the safe-haven U.S. dollar and Japanese yen early Monday, but extended last week's gains against the euro, as worries about German bank WestLB added to renewed euro-area sovereign concerns. The U.S. dollar was at C$0.9878 early Monday, from C$0.9872 late Friday, according to data provider CQG. It slipped to a session low of C$0.9846 overnight, then continued to wander in a slim, half-cent range. The euro was under pressure Monday, trading against the Canadian dollar at C$1.3273, from C$1.3378 late Friday. The common currency began its selloff early in the European session, on headlines that cast doubt over WestLB's future. Sources close to the situation told Dow Jones Newswires that the troubled lender could be preparing to outline a government-supported restructuring plan before the European Commission's deadline Tuesday, setting the groundwork for a breakup of the bank. The news sent the euro sliding after a relatively robust Asian session, which saw the common currency climbing on optimism about Egypt after President Hosni Mubarak finally resigned and as Chinese trade data showed a surge in imports. The euro early Monday was trading at against the Canadian dollar at levels not seen since Jan. 19. Meanwhile, the Canadian dollar was "firmly rooted" against its U.S. counterpart, said Nathaniel Campbell, director foreign exchange sales at BMO Capital Markets in Toronto. Upcoming mergers and acquisitions activity all appear to be favorable for the Canadian unit, and unless the week's U.S. data are "dismal," suggesting further struggles for the North American economy, the Canadian currency is likely to continue its slow grind stronger, Campbell said. TD Securities said it looks for the pair to continue range-trading for much of the week, "as steady commodity prices and the broadly firmer tone of the [U.S. dollar] provide little incentive for the market to lean too hard on the base of the recent trading range." Such narrow trading bands have been the norm for the U.S. and Canadian pairing, which has tended lately to be traded on a "buy/sell North America" basis. Wider gains by the Canadian dollar are more likely to come in cross trading against currencies other than the U.S. unit, analysts say. Traders see the greenback traveling between C$0.9850 and C$0.9932. There are no major data releases on tap in Canada or the U.S. Monday. -Karen Johnson, Dow Jones Newswires; 416-306-2022; karen.johnson@dowjones.com

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