CANADA FX DEBT-C$ weakens as oil tumbles on OPEC deal doubts

(Adds dealer comment, updates prices to close)
    * Canadian dollar settles at C$1.3437 to US$, or 74.42 U.S.
    * Bond prices mixed across flatter yield curve

    By Alastair Sharp
    TORONTO, Nov 29 (Reuters) - The Canadian dollar weakened
slightly against its U.S. counterpart on Tuesday as oil tumbled
on doubts that leading exporters will agree a deal to cut crude
output and the greenback fell against a basket of major
    Members of the Organization of the Petroleum Exporting
Countries were set to meet in Vienna on Wednesday, aiming to
implement a deal outlined in September to cut output. But key
OPEC members appeared to disagree over details of the plan,
pushing crude prices down 4 percent. 
    "Hope springs eternal that something could still be hammered
out, but it just feels like there's very low likelihood or
optimism given Iran's position and whatnot," said Don Mikolich,
executive director of foreign exchange sales at CIBC Capital
    The Canadian dollar settled at C$1.3437 to the
greenback, or 74.42 U.S. cents, weaker than Monday's close of
C$1.3421, or 74.51 U.S. cents.
    Mikolich said he was surprised that the loonie had not
pushed above C$1.35 on the fall in the price of oil, one of
Canada's major exports.
    The currency's strongest level of the session was C$1.3401,
while its weakest was C$1.3481.
    The U.S. dollar fell, giving up earlier sharp gains
following the release of stronger-than-expected U.S.
third-quarter gross domestic product numbers. 
    Canada's GDP data for the third quarter is due on Wednesday.
Economists expect growth of 3.4 percent, according to a Reuters
poll, up from a 1.6 percent drop in the second quarter. 
    "There's some room for disappointment there," Mikolich said.
    Canada's current account deficit narrowed in the third
quarter after three straight quarterly increases as exports
picked up, Statistics Canada said. 
    Many of the uncertainties surrounding the economic outlook
that the Bank of Canada faced at its last policy decision still
remain, Governor Stephen Poloz said late on Monday. 
    The market is too complacent about the prospect of further
interest rate cuts from the Bank of Canada, some economists
said, as an uncertain outlook for the NAFTA trade accord risks
derailing an expected pick-up in Canada's business spending.
    Canadian government bond prices were mixed across a flatter
yield curve, with the two-year bond falling 3
Canadian cents to yield 0.676 percent and the benchmark 10-year
 rising 13 Canadian cents to yield 1.510 percent.
    Last week, the 10-year yield touched an 11-month high at
1.614 percent as investors bet that the policies of U.S.
President-elect Donald Trump will lead to higher inflation.

 (Additional reporting by Fergal Smith; Editing by Meredith
Mazzilli and Chris Reese)