* Canadian dollar hits six-week high
* Bonds lower across the curve
* Canada housings starts up 6.1 pct, better-than-expected
By Ka Yan Ng
TORONTO, March 8 (Reuters) - The Canadian dollar hit a six-week high against the U.S. dollar on Monday after data showed a bigger-than-expected rise in Canadian housing starts.
Data showed new home construction in Canada rose 6.1 percent in February to a seasonally adjusted rate of 196,700 units, beating the consensus expectation of analysts who had called for 190,000 starts. [ID:nN08168275]
The Canadian dollar rose as high as C$1.0257 CAD=D4 against its U.S. counterpart, or 97.49 U.S. cents, its strongest since Jan. 19.
But it pared gains as the details of the report showed that new home construction in the often-volatile multi-dwelling sector far outpaced the gains made by the closely-watched single-family home component.
"The details weren't quite as spectacular as we would have liked. So you get a little bit of a reaction of Canadian dollar strength after the number, and then it's faded as people dig into the numbers a bit," said David Watt, senior currency strategist at RBC Capital Markets.
Still, the commodity-linked currency held onto a good portion of early gains, boosted by increased investor appetite for risk and by a rise in oil prices, an important Canadian export, to nearly $82 a barrel. CLc1[O/R]
At 8:50 a.m. (1350 GMT), the Canadian dollar was at C$1.0268 to the U.S. dollar, or 97.39 U.S. cents, up from Friday's finish at C$1.0305 to the U.S. dollar, or 97.04 U.S. cents.
The Canadian dollar is working on its seventh straight day of gains after last week rising 2 U.S. cents on a combination of strong economic data and firming prices for key Canadian commodities. It was also fueled by a Bank of Canada statement last week that sounded slightly more hawkish on rates. [ID:nN02149877]
Bonds, on the other hand, have headed lower because of solidifying expectations that the global recovery is on track and that domestic interest rates are likely to rise in the second half of the year.
The two-year Canadian government bond CA2YT=RR fell 4 Canadian cents to C$99.93 to yield 1.538 percent, while the 10-year bond CA10YT=RR dropped 17 Canadian cents to C$102.01 to yield 3.493 percent. (Editing by Padraic Cassidy)