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* C$ at $1.0065 vs US$, or 99.35 U.S. cents * C$ weakens against most currencies, except yen * Manufacturing sales fall the most in 3-1/2 years in Dec * Bond prices rise modestly across curve By Solarina Ho TORONTO, Feb 15 (Reuters) - The Canadian dollar weakened more than half a cent against the greenback on Friday following much-weaker-than-expected domestic manufacturing data that highlighted the negative impact of the strong currency on exports. Manufacturing sales recorded the biggest decline in about 3-1/2 years in December, due to weaker auto production and lower sales across most other industries, government data showed. "It's a pretty dismal report. Not a nice way to end a year," said Sal Guatieri, senior economist at BMO Capital Markets. "Very few regions are immune to the negative impact of the high Canadian dollar. It's not surprising the currency would weaken on such a dismal report." At 9:21 a.m. (1421 GMT), the Canadian dollar weakened to C$1.0065 versus the U.S. dollar, or 99.35 U.S. cents, from C$1.0026, or 99.74 U.S. cents just before the data was released and Thursday's North American session close at C$1.0012, or 99.88 U.S. cents. Canada's dollar weakened against all other major currencies, except the Japanese yen. Canadian government bonds rose moderately across the curve, with the two-year bond rising half a Canadian cent to yield 1.125 percent and the benchmark 10-year bond climbing 3 Canadian cents to yield 1.997 percent.