CANADA FX DEBT-C$ edges higher, but set to fall 16 percent for 2015
* Canadian dollar at C$1.3877 or 72.06 U.S. cents * Bond prices higher across the maturity curve TORONTO, Dec 31 (Reuters) - The Canadian dollar edged higher on Thursday against its U.S. counterpart after weaker-than-expected U.S. data trimmed gains for the greenback against a basket of major currencies, trading in a tight range ahead of the New Year's Day holiday. The loonie, as Canada's currency is colloquially known, is on track to fall more than 16 percent in 2015, pressured by deep losses for crude oil prices and two rate cuts from the Bank of Canada, while the U.S. Federal Reserve hiked rates for the first in more than nine years. U.S. jobless claims rose to 287,000 in the latest week from 267,000 the prior week. The consensus forecast was for 270,000. Oil prices headed for a second year of steep losses in their last trading hours of 2015 as record OPEC supply created an unprecedented global glut that may take another year to clear. U.S. crude prices fell 0.66 percent to $36.36 a barrel, while Brent crude lost 0.22 percent to $36.38. At 9:04 a.m. EST (1404 GMT), the Canadian dollar was trading at C$1.3877 to the greenback, or 72.06 U.S. cents, stronger than Wednesday's close of C$1.3885, or 72.02 U.S. cents. The currency's strongest level of the session was C$1.3859, while its weakest level was C$1.3901. It had hit its weakest level in more than 11 years on Dec. 18 at C$1.4003. Canadian government bond prices were higher across the maturity curve ahead of an early close for the market, tracking gains for Treasuries. The two-year price was up 2 Canadian cents to yield 0.474 percent and the benchmark 10-year rose 25 Canadian cents to yield 1.374 percent. The curve flattened, as the spread between 2-year and 10-year yields narrowed by 1.8 basis points to 90.0 basis points, indicating outperformance for longer-dated maturities. The Canada-U.S. 10-year bond spread was 0.5 basis point narrower at -89.8 basis points, trimming recent outperformance for Canadian bonds but still trading near a record-wide gap. (Reporting by Fergal Smith; Editing by Meredith Mazzilli)
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