* Canadian dollar at C$1.3653, or 73.24 U.S. cents
* Bond prices slightly lower across the yield curve
By Fergal Smith
TORONTO, April 28 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Friday, retaining this week's
defensive bias as domestic data showed the economy stalled in
February, offsetting a rebound in oil prices.
Canadian gross domestic product was flat in February,
matching the forecast by analysts in a Reuters poll, after
robust growth in January.
"It is a soft month in an otherwise solid quarter," said
Derek Holt, head of capital markets economics at Scotiabank.
Oil prices rose after dropping to a one-month low the
previous day, prompting investors to buy at cheaper levels ahead
of a May Organization of the Petroleum Exporting Countries
meeting at which producers could extend output cuts.
At 9:01 a.m. ET (1301 GMT), the Canadian dollar was
trading at C$1.3653 to the greenback, or 73.24 U.S. cents,
weaker than Thursday's close of C$1.3624, or 73.40 U.S. cents.
The currency traded in a range of C$1.3625 to C$1.3666.
On Thursday, the loonie touched a fresh 14-month low at
C$1.3670. It is on course to fall 1.1 percent this week,
pressured by recent weakening in oil prices and a more uncertain
outlook for the North American Free Trade Agreement.
Canadian government bond prices were slightly lower across
the yield curve in sympathy with U.S. Treasuries. The two-year
dipped 1.5 Canadian cents to yield 0.742 percent and
the 10-year declined 5.2 Canadian cents to yield
1.581 percent.
On Thursday, the 10-year yield touched a three-week high at
1.621 percent.
(Reporting by Fergal Smith; Editing by Nick Zieminski)