CANADA FX DEBT-C$ weakens to 3-week low on China trade data, lower oil prices

* Canadian dollar at C$1.2979, or 77.05 U.S. cents
    * Bond prices higher across the maturity curve

    TORONTO, May 9 (Reuters) - The Canadian dollar weakened to a
three-week low against its U.S. counterpart on Monday, tracking
losses for other commodity currencies after China's trade data
disappointed and oil prices turned lower.
    The loonie has fallen 4 percent from a 10-month high last
week of C$1.2461 after weaker-than-expected domestic trade data
and wildfire-driven oil production cuts in Alberta's oil sands
region hurt Canada's economic outlook.
    Economists say second-quarter growth may slow to a
standstill, leaving the central bank on hold. 
    Speculators have increased bullish bets on the Canadian
dollar, Commodity Futures Trading Commission data showed on
Friday. Net long Canadian dollar positions rose to 18,943
contracts in the week ended May 3 from 11,999 contracts the
prior week. 
    However, some strategists have turned bearish on the loonie
after technical support for the currency weakened last week.
    "The time is ripe for the loonie to weaken after three
months of sustained strength," said Bipan Rai, executive
director, macro strategy at CIBC Capital Markets in a research
    At 9:21 a.m. EDT (1321 GMT), the Canadian dollar 
was trading at C$1.2979 to the greenback, or 77.05 U.S. cents,
weaker than Friday's close of C$1.2919, or 77.41 U.S. cents.
    The currency's strongest level of the session was C$1.2906,
while it touched its weakest since April 18 of C$1.2983.    
    China's exports and imports fell more than expected in
April, underlining weak demand at home and abroad and cooling
hopes of a recovery in the world's second-largest economy.
    China is a major customer for Canada's commodity exports.
    U.S. crude prices were down 1.28 percent to $44.09 a
    Canadian seasonally adjusted housing starts were 191,512 in
April, compared with a revised 202,375 units in March.
    Canadian government bond prices rose across the maturity
curve, with the two-year price up 0.5 Canadian cent
to yield 0.559 percent and the benchmark 10-year 
rising 8 Canadian cents to yield 1.345 percent.
    The curve flattened, as the spread between the 2-year and
10-year yields narrowed by 0.7 of a basis point to touch its
narrowest since April 20 of 78.6 basis points, indicating
outperformance for longer-dated maturities.

 (Reporting by Fergal Smith; Editing by Meredith Mazzilli)