CANADA FX DEBT-C$ slips as oil falls, but currency barely dents recent rally

* Canadian dollar at C$1.4010 or 71.38 U.S. cents
    * Bond prices lower across the maturity curve

    TORONTO, Feb 1 (Reuters) - The Canadian dollar dipped
slightly against its U.S. counterpart on Monday as weak Chinese
data added to global growth concerns and crude oil prices fell,
but the move barely dented the recent rally for the currency.
    The currency has rallied nearly 5 percent since
hitting on Jan. 20 its weakest since 2003 at C$1.4689, helped by
expectations that the Bank of Canada will not cut rates in the
near term. 
    A recovery in crude oil prices from 12-year lows and
expectations of more cheap money from some of the world's top
central banks have added to support for the risk-sensitive
commodity currency.
    Oil fell more than 3 percent on Monday, however, as weak
economic data from China, the world's largest energy consumer,
weighed on prices and an OPEC source played down talk of an
emergency meeting to stem the decline. 
    China's manufacturing activity contracted at its fastest
pace in almost 3-1/2 years in January, an official survey
    At 9:22 a.m. EST (1422 GMT), the Canadian dollar 
was trading at C$1.4010 to the greenback, or 71.38 U.S. cents,
slightly weaker than the Bank of Canada's official close of
C$1.4006, or 71.40 U.S. cents.
    The currency's strongest level of the session was C$1.3967,
while its weakest level was C$1.4062. Last Thursday it touched
its strongest since Jan. 5 at C$1.3948.     
    Bearish bets on the Canadian dollar rose last week to the
highest in five months, Commodity Futures Trading Commision data
showed on Friday, as steady Bank of Canada policy an and oil
price recovery failed to shake speculation against the currency.
    Net short Canadian dollar positions increased to 66,819
contracts in the week ended Jan. 26 from 66,386 in the prior
week. That is the most extreme net short position since August
last year. 
    Canadian government bond prices were lower across the
maturity curve, with the two-year price down 0.5
Canadian cent to yield 0.421 percent and the benchmark 10-year
 falling 3 Canadian cents to yield 1.226 percent.
    The Canada-U.S. two-year bond spread was 1.9 basis points
more negative at -37.3 basis points as recent underperformance
by Canadian government bonds was pared.
    Canadian employment data for January and trade data for
December are due on Friday. 

 (Reporting by Fergal Smith; Editing by Meredith Mazzilli)