CANADA FX DEBT-C$ edges lower as greenback notches strong gains

* Canadian dollar at C$1.3444, or 74.38 U.S. cents
    * Bond prices lower across the yield curve

    TORONTO, Jan 3 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Tuesday as broader gains for the
greenback offset higher oil prices.
    Oil, one of Canada's major exports, reached 18-month highs,
buoyed by hopes that a deal between OPEC and other big oil
exporters to cut production will drain a global supply glut.
    U.S. crude prices were up 2.42 percent at $55.02 a
    The U.S. dollar index pushed to a fresh 14-year high
after stronger-then-expected U.S. manufacturing data. 
    Gains for the greenback came as upbeat Chinese data helped
boost global stock markets. 
    At 10:05 a.m. ET (1505 GMT), the Canadian dollar 
was trading at C$1.3444 to the greenback, or 74.38 U.S. cents,
slightly weaker than Monday's close of C$1.3438, or 74.42 U.S.
cents, according to Reuters data.
    The currency's strongest level of the session was C$1.3405,
while its weakest was C$1.3461.
    The Bank of Canada's official close on Friday, the last
trading day of 2016, was C$1.3427, or 74.48 U.S. cents.
    The loonie rose 3 percent in 2016, its first annual gain
since 2012.
    Speculators slashed bearish bets on the Canadian dollar for
the second straight week, according to Commodity Futures Trading
Commission data and Reuters calculations. Net short Canadian
dollar positions fell to 1,598 contracts as of Dec. 27 from
11,754 a week earlier.        
    Canadian government bond prices were lower across the yield
curve, with the two-year price down 5.5 Canadian
cents to yield 0.777 percent and the benchmark 10-year
 falling 50 Canadian cents to yield 1.772 percent.
    In mid-December, the 10-year yield touched its highest in 17
months at 1.859 percent.
    Canada's trade report for November and employment report for
December are due on Friday. 

 (Reporting by Fergal Smith)