CANADA FX DEBT-C$ extends gains as oil, global equities rally

* Canadian dollar at C$1.3253, or 75.45 U.S. cents
    * Bond prices mostly higher across the maturity curve

    TORONTO, Aug 27 (Reuters) - The Canadian dollar firmed
against its U.S. counterpart on Thursday, as crude prices surged
following a global equities rally and an unexpected drop in U.S.
oil inventories.
    The loonie, which fell to 11-year lows earlier this week as
investors rushed to safety on worries about slowing growth in
China, also was stronger against other major currencies.
    The strength came even as the greenback rose following
upbeat U.S. data that showed the economy grew faster than
initially thought during the second quarter. The data was
reassuring to investors and central bank officials preoccupied
by worries over China's impact on the global economy.
    * At 9:40 a.m. EDT (1340 GMT), the Canadian dollar 
was trading at C$1.3253 to the U.S. dollar, or 75.45 U.S. cents,
extending Wednesday's gains. The Bank of Canada's official close
on Wednesday was C$1.3315, or 75.10 U.S. cents.
    * Canada's currency has swung broadly so far in the session,
trading between C$1.3186 and C$1.3305.
    * U.S. gross domestic product expanded at a 3.7 percent
annual pace in the second quarter instead of the 2.3 percent
rate reported last month, the Commerce Department said in its
second GDP estimate. 
    * Other data also painted a healthy employment picture in
the United States, with initial claims for state unemployment
benefits slipping 6,000 to a seasonally adjusted 271,000 last
    * U.S. crude prices were up 3.89 percent to $40.10 a
barrel, while Brent crude added 3.92 percent to $44.83.
 Oil prices were supported by data on Wednesday showing
U.S. crude inventories fell 5.5 million barrels in the week to
Aug. 21, the biggest one-week decline since early June.
    * The Canadian dollar is expected to trade between C$1.3145
and C$1.3280 against the U.S. dollar on Thursday, according to
National Bank Financial.
    * Canadian government bond prices were mostly higher across
the maturity curve, with the two-year price down 3.5
Canadian cents to yield 0.407 percent and the benchmark 10-year
 falling 13 Canadian cents to yield 1.455 percent.
    * The Canada-U.S. two-year bond spread widened to -29.7 
basis points, while the 10-year spread widened to -74.0 basis

 (Reporting by Solarina Ho; Editing by Paul Simao)