CANADA FX DEBT-C$ slips on positive U.S. economic data; oil supports

* C$ at C$1.0505 vs US$, or 95.19 U.S. cents
    * U.S. Q2 GDP grows at 2.5 pct annual rate; job claims fall
in previous week
    * Canada current account widens to C$14.6 billion in Q2
    * Bond prices fall across maturity curve

    By Solarina Ho
    TORONTO, Aug 29 (Reuters) - The Canadian dollar softened
against its U.S. counterpart on Thursday, after data showed the
U.S. economy accelerated more quickly than expected during the
second quarter.
   U.S. gross domestic product grew at a 2.5 percent annual rate
- more than double the pace of the previous three months - while
the number of Americans filing new claims for unemployment
benefits fell last week. 
    The figures are the latest indicators the Federal Reserve
could be ready to scale back its economic stimulus program. 
    "Slightly better-than-expected U.S. GDP number gave the U.S.
dollar a bit of a boost. That has the Canadian dollar on a back
foot," said Benjamin Reitzes, senior economist and foreign
exchange strategist at BMO Capital Markets.
    "Oil prices - even though they're little bit off today -
continue to give the Canadian dollar some support, limiting the
potential weakness for now as long as oil prices stay as firm as
they are."
    Brent crude and U.S. crude jumped some five and four percent
respectively over the past two days on concerns over Middle East
oil supplies following expectations the West may be gearing up
for a military operation in response to last week's chemical
weapons attack in Syria. 
    Oil prices eased somewhat on Thursday, however, as the
possibility of a delay in a military strike helped calm jitters.
    The Canadian dollar was trading at C$1.0505 to the
U.S. dollar, or 95.19 U.S. cents at 9:42 a.m. (1341 GMT), softer
than Wednesday's North American finish at C$1.0485, or 95.37
U.S. cents.
    The currency is expected to trade between C$1.0480 and
C$1.0530 during the session according to RBC Capital Markets.
    Domestically, Canada's current account gap widened to C$14.6
billion during the second quarter, in line with expectations, as
exports struggled to gain traction and oil shipments to the
United States fell. Meanwhile, producer prices rose for the
second straight month in July.  
    Second quarter Canadian economic growth figures and a slew
of U.S. data on Friday will be the next driver for the Canadian
dollar. Economists are expecting a weaker reading for Canada's
    Canadian government bond prices fell across the maturity
curve. The two-year bond was off 3 Canadian cents,
yielding 1.216 percent, while the benchmark 10-year bond
 retreated 29.5 Canadian cents, yielding 2.660