CANADA FX DEBT-C$ slumps to 11-year low on flight to safety

(Updates with analyst comment, details, closing figures)
    * Canadian dollar at C$1.3346, or 74.93 U.S. cents
    * Bond prices lower across the maturity curve

    By Solarina Ho
    TORONTO, Aug 25 (Reuters) - The Canadian dollar reversed
earlier gains on Tuesday to stumble to 11-year lows against the
U.S. dollar, which rebounded from seven-month lows following an
interest rate cut by China.
    The People's Bank of China announced a 25 basis point
interest rate cut the one-year benchmark lending rate, after
volatile trading on Monday as global markets spiraled into panic
selling on worries over the impact of slower Chinese growth.
    Equity markets rebounded early on Tuesday, but the rally
evaporated late in the North American session as the fears about
China took hold again.
    "What we're looking here is a general shift in risk
sentiment that was looking a little bit better this morning, but
has since faded pretty dramatically," said David Tulk, chief
Canada macro strategist at TD Securities.
    "The Canadian dollar is quite clearly caught in the
crossfire from that side of things. ... I think flight to safety
is definitely dominant."
    The Canadian dollar closed at C$1.3346 to the
greenback, or 74.93 U.S. cents, weaker than the Bank of Canada's
official close of C$1.3262, or 75.40 U.S. cents, on Monday.
    The loonie traded broadly between C$1.3144 and C$1.3353,
touching its weakest level since mid-2004. Investors expect the
currency to soften further in the coming weeks and months.
    The price of crude, a key Canadian export, rebounded from
hefty losses on Monday, but remained under $40 a barrel, near
6-1/2-year lows. 
    Canadian government bond prices were lower across the
maturity curve, with the two-year price down 6.5
Canadian cents to yield 0.355 percent and the benchmark 10-year
 falling 65 Canadian cents to yield 1.329 percent.
    The Canada-U.S. two-year bond spread widened to -25 basis
points, while the 10-year spread widened to -74.2 basis points.

 (Reporting by Solarina Ho; Editing by Leslie Adler)