CANADA FX DEBT-C$ weakens after flat GDP reading for October

    * Canadian dollar at C$1.2769, or 78.31 U.S. cents
    * Bond prices mixed across the maturity curve

    TORONTO, Dec 22 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Friday after domestic data
surprisingly showed economic growth paused in October, muting
expectations the central bank might hike rates in January.
    The weaker-than-expected gross domestic product data came a
day after robust inflation and retail sales data sent the loonie
and domestic bond yields sharply higher.             
    The currency's retreat also came as prices for oil, a major
Canadian export, slipped.      
    At 8:59 a.m. ET (1359 GMT), the Canadian dollar          was
trading at C$1.2769 to the greenback, or 78.31 U.S. cents, down
0.2 percent. It had hit its strongest level in more than two
weeks on Thursday. 
    The currency is on track for a 0.8 percent rise on the week.
    Canadian government bond prices were mixed across a steeper
maturity curve, with the two-year            price up 3 Canadian
cents to yield 1.662 percent and the 20-year             down 5
cents to yield 2.212 percent.
    The benchmark 10-year             rose 5 Canadian cents to
yield 2.024 percent.    
    The Canadian dollar was also underperforming most of its key
currency counterparts, including the Japanese yen, the euro, and
the Australian dollar.

 (Reporting by Alastair Sharp)