CANADA FX DEBT-C$ weakens in quiet pre-Christmas session

* Canadian dollar at C$1.0624 or 94.13 U.S. cents
    * Bond prices lower across the maturity curve

    By Leah Schnurr
    TORONTO, Dec 24 (Reuters) - The Canadian dollar slipped
slightly against the greenback on Tuesday in quiet trading ahead
of the Christmas Day holiday, and investors continued to expect
weakness over the longer term for the loonie. 
    There are no Canadian economic releases scheduled until the
new year, but data out of the United States showed orders for
long-lasting manufactured goods surged in November.
    "It is yet another sign that the American economy is indeed
coming back from the depths of poor growth," said Brad Schruder,
director of foreign exchange sales at BMO Capital Markets in
    Stronger growth in the United States, a key trading partner
of Canada, should ultimately be beneficial to the latter. 
    The Canadian dollar was at C$1.0624 to the
greenback, or 94.13 U.S. cents, weaker than Monday's close of
C$1.0611, or 94.24 U.S. cents. 
    Trading was expected to be quiet, though lighter liquidity
can sometimes make moves volatile.
    The loonie has been hit in recent months by a more neutral
policy shift from the Bank of Canada and the U.S. Federal
Reserve's move last week to begin reducing its massive
market-friendly stimulus. That stimulus has helped prop up the
U.S. economy and its equity markets for much of 2013.
    The Canadian dollar touched a 3-1/2-year low against the
U.S. currency in the wake of the Fed's decision but has since
retraced some of those losses. The loonie has also gained ground
against some of the other major currencies.
    "There is reason to take heart because this market was
expecting the Canadian dollar to be sold aggressively once the
Federal Reserve began their tapering program," said Schruder.
    "What you've seen so far is actually a very muted response
to the beginning of tapering, and that has prompted a lot of
investors that were already short the Canadian dollar to trim
some of those positions."
    Even so, expectations that the loonie will weaken over the
longer-term are still firmly in play, said Schruder.
    Canadian government bond prices were lower across the
maturity curve, with the two-year down 1 Canadian
cent to yield 1.133 percent and the benchmark 10-year
 down 21 Canadian cents to yield 2.709 percent. The
bond market will close early, along with equities.
    Canadian bonds and equity markets will be closed on
Wednesday and Thursday for the Christmas holiday.