CANADA FX DEBT-C$ barely stronger after hitting 11-1/2-year trough

(Adds strategist comment, details; updates prices)

* Canadian dollar settles at C$1.3738, or 72.79 U.S. cents

* Bond prices higher across the maturity curve

TORONTO, Dec 14 (Reuters) - The Canadian dollar strengthened slightly against its U.S. counterpart on Monday after hitting a fresh 11-1/2-year low as oil prices stumbled further.

While oil reversed course robustly later in the North American trading session, the Canadian currency was more circumspect.

“It seems there is a growing voice out there that has this $40-a-barrel price as a line in the sand where the Canadian dollar is punished on moves lower and yet doesn’t necessarily rebound on moves higher,” said Brad Schruder, director of foreign exchange sales at BMO Capital Markets.

Brent crude settled at $37.92 after falling as low as $36.33 a barrel, its weakest since December 2008, while U.S. crude settled up 1.9 percent at $36.31 after earlier falling to $34.53.

The Canadian dollar settled at C$1.3738 to the greenback, or 72.79 U.S. cents, barely stronger than Friday’s close of C$1.3742, or 72.77 U.S. cents.

The loonie’s strongest level of the session was C$1.3677, while it hit its weakest since June 2004 at C$1.3780.

While Schruder said he thinks the loonie’s fall since early December, when the OPEC oil producers group failed to agree an crude production ceiling amid a global supply glut, had been overdone, he also said the outlook for next year is not rosy.

Canada’s finance minister said the weaker loonie will probably face further pressure from persistently low commodity prices that also complicate the fiscal situation.

Data from China’s National Bureau of Statistics suggested the country’s economic slowdown is stabilizing after the government’s additional monetary and fiscal stimulus this year. China is a major customer of Canada’s natural resource exports.

Canada’s household debt-to-income ratio rose to a record in the third quarter, while the Teranet-National Bank Composite House Price Index rose 6.1 percent from a year earlier.

Canadian government bond prices were lower across the maturity curve, with the two-year price down 6 Canadian cents to yield 0.509 percent while the benchmark 10-year fell 59 Canadian cents to yield 1.471 percent.

The Canada-U.S. two-year bond spread was 2.6 basis points wider at minus 43.9 basis points, near its deepest negative spread in more than eight years as Treasuries underperformed ahead of a likely Federal Reserve rate hike this week. (Additional reporting by Fergal Smith; Editing by Jeffrey Benkoe and Meredith Mazzilli)