CANADA FX DEBT-Oil's drop, greenback rally pull C$ to 5-1/2 year lows

* Canadian dollar at C$1.1785 or 84.85 U.S. cents
    * Bond prices higher across the maturity curve

    By Solarina Ho
    TORONTO, Jan 5 (Reuters) - The Canadian dollar extended its
new year losses against the U.S. dollar on Monday, retreating to
new 5-1/2 year lows as oil prices sank further and the
greenback's rally showed no sign of abetting.
    The U.S. dollar surged broadly, spurred by expectations of
monetary policy easing in the euro zone and by rising political
concerns in Europe ahead of elections in Greece, which pushed
the euro to its lowest level since early 2006. 
    U.S. crude prices slid closer to the $50 mark as worries
over soft demand and excess global supply continued to drag on
the market. Canada is a major crude exporter and the Canadian
dollar has been hit hard by plunging oil prices. 
    "It's really being pulled around by the U.S. dollar and
crude prices," said Adam Cole, global head of FX strategy at RBC
Capital Markets in London.
    "CAD is doing much better on the crosses versus the U.S.
dollar, however, which is an entirely normal phenomenon... CAD
is holding up pretty well."
    The Canadian dollar, which was stronger against
nearly every major currency except the U.S. dollar and the
Japanese yen, was trading at C$1.1785 to the greenback,
or 84.85 U.S. cents, weaker than Friday's Bank of Canada close
of C$1.1762, or 85.02 U.S. cents.
    At one point during the session, the loonie touched
C$1.1843, or 84.44 U.S. cents, its weakest level since May 4,
2009, extending Friday's more than 1 percent plunge. 
    The currency is unlikely to see further dramatic moves in
the near term, Cole said, with markets awaiting key economic
data later in the week, including employment reports for
December from Canada and the United States on Friday.
    Canadian government bond prices were higher across the
maturity curve, with the two-year rising half a
Canadian cent to yield 0.998 percent and the benchmark 10-year
 climbing 20 Canadian cents to yield 1.721 percent.

 (Editing by Peter Galloway)