CANADA FX DEBT-C$ pulls back from 3-month high ahead of business survey

    * Canadian dollar at C$1.2434, or 80.42 U.S. cents
    * Bond prices lower across the yield curve

    TORONTO, Jan 8 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Monday, pulling back from
Friday's three-month high ahead of a business survey that could
guide bets on next week's interest rate decision by the Bank of
    The likelihood of a rate hike on Jan. 17 has jumped to
nearly 80 percent after data on Friday showed the economy added
almost 80,000 jobs in December for the second month in a row.
    The Bank of Canada will release its business outlook report,
which is based on a survey of about 100 companies, at 10:30 a.m.
EST (1530 GMT). Analysts will look to see whether companies were
feeling more upbeat in the fourth quarter.
    The U.S. dollar        climbed against a basket of major
currencies as investors in the euro took profits after a recent
    At 9:56 a.m. EST (1456 GMT), the Canadian dollar         
was down 0.2 percent at C$1.2434 to the greenback, or 80.42 U.S.
cents. The currency traded in a range of C$1.2378 to C$1.2437.
    On Friday, the loonie touched its strongest since Sept. 27
at C$1.2355.
    Still, speculators have cut bullish bets on the Canadian
dollar to their lowest since July, data from the U.S. Commodity
Futures Trading Commission and Reuters calculations showed on
Friday. As of Jan. 2, net long positions had fallen to 14,739
contracts from 17,346 a week earlier.             
    Prices of oil, one of Canada's major exports, edged higher
on a slight decline in the number of U.S. rigs drilling for new
production and the Organization of the Petroleum Exporting
Countries' sustained output cuts.             
    U.S. crude        prices were up 0.10 percent at $61.50 a
    Canadian government bond prices were lower across the yield
curve, with the two-year            down 1 Canadian cent to
yield 1.781 percent and the 10-year             falling 8
Canadian cents to yield 2.164 percent.
    On Friday, the two-year yield reached its highest intraday
since June 2011 at 1.786 percent.             

 (Reporting by Fergal Smith; Editing by Lisa Von Ahn)