CANADA FX DEBT-C$ at weakest in 2 weeks as oil fall offsets trade data

    * Canadian dollar at C$1.3170, or 75.93 U.S. cents
    * Bond prices lower across the maturity curve

    TORONTO, Feb 7 (Reuters) - The Canadian dollar hit its
weakest level in two weeks against its U.S. counterpart on
Tuesday as a fall in oil prices offset data showing the country
notched a second straight trade surplus for the first time in
more than two years. 
    Prices for oil, a major Canadian export, were down more than
1 percent in morning trade as growing evidence of a revival in
U.S. shale production offset lower output by OPEC and other
    At 9:24 a.m. ET (1424 GMT), the Canadian dollar          was
trading at C$1.3170 to the greenback, or 75.93 U.S. cents,
weaker than the Bank of Canada's close on Monday of C$1.3087, or
76.41 U.S. cents.
    Canada posted a C$923 million trade surplus in December,
thanks largely to booming crude oil exports, Statistics Canada
said. November's surplus was also revised sharply higher.
    But while overall exports rose by 0.8 percent in December,
export volumes actually fell by 1.4 percent.
    Meanwhile the U.S. trade deficit fell more than expected in
December, including a big decline in its deficit with Canada, as
exports rose to their highest level in more than 1-1/2 years,
outpacing an increase in imports.             
    The loonie's strongest level of the session was C$1.3076,
while its weakest level was C$1.3213.
    U.S. crude        prices were down 1.62 percent to $52.15 a
barrel, while Brent         lost 1.60 percent to $54.83.     
    The recent upsurge in the Canadian dollar will peter out
over the coming months as an expected widening gap between
steady interest rates in Canada and rising U.S. rates eclipses
higher oil prices, a Reuters poll found.             
    Canadian government bond prices were lower across the
maturity curve, with the two-year            price down 1.5
Canadian cents to yield 0.745 percent and the benchmark 10-year
            falling 9 Canadian cents to yield 1.711 percent.

 (Reporting by Alastair Sharp; Editing by Meredith Mazzilli)