CANADA FX DEBT-C$ edges higher, but set to fall 16 percent for 2015

Thu Dec 31, 2015 9:29am EST
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* 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
    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.
    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)