CANADA FX DEBT-C$ gains as oil rises, U.S. dollar slips further

* Canadian dollar at C$1.2499 or 80.01 U.S. cents
    * Bond prices mixed across the maturity curve

    By Alastair Sharp
    TORONTO, March 23 (Reuters) - The Canadian dollar gained
against its U.S. counterpart on Monday, boosted by a rise in the
price of oil, as traders weighed the possibility that the
Federal Reserve will wait for longer before raising U.S.
interest rates. 
    Oil, a major Canadian export, firmed despite pressure from a
global supply glut as the U.S. dollar extended last week's
steepest weekly decline in 3-1/2 years. 
    The greenback has struggled since a Fed statement last week 
that signaled a slower approach to raising rates than some
investors had expected.
    "What the Fed has done is created a lot more sensitivity to
upcoming economic news," said Rahim Madhavji, president of
    "In Canada, oil is the canary in the coalmine. Everyone's
got to look at oil prices to really figure out what's going to
happen to the economy and possibly how will the Bank of Canada
react," Madhavji said. 
    The Canadian dollar ended the North American
session changing hands at C$1.2499 against the U.S. dollar, or
80.01 U.S. cents, stronger than Friday's North American session
close of C$1.2579, or 79.50 U.S. cents.
    The dollar resumed its fall on Monday as St. Louis Fed
President James Bullard told CNBC that the dollar index,
which measures the greenback against a basket of major
currencies, was not far from fair value. He also said it was
unclear how much more the dollar would strengthen against the
    Camilla Sutton, chief currency strategist at Scotiabank,
said the U.S. dollar selloff could push the Canadian currency to
near the 50-day average at C$1.2476, with last week's low at
C$1.2450 the next resistance level.
    Canadian government bond prices saw subdued action across
the maturity curve, with the two-year up half a
Canadian cent to yield 0.455 percent and the benchmark 10-year
 slipping 4 Canadian cents to yield 1.308 percent.

 (Additional reporting by Andrea Hopkins; Editing by Peter
Galloway and James Dalgleish)