* Canadian dollar hits two-week low
* Slide in oil blamed for weak currency
* Bond prices mostly higher as stocks selloff
By Jennifer Kwan
TORONTO, Nov 12 (Reuters) - The Canadian dollar closed lower versus the U.S. dollar on Wednesday as a steep slide in the price of crude and falling metals prices pushed the currency to its lowest level in two weeks.
Bond prices were mostly higher as investors sought safety amid a broad selloff in equity markets. Bond markets in Canada and the United States were closed on Tuesday.
The Canadian currency was at C$1.2374 to the U.S. dollar, or 80.81 U.S. cents, down from C$1.2050 to the U.S. dollar, or 82.99 U.S. cents, at Tuesday's close.
Weakness in the price of crude, which settled at $56.16 a barrel, its lowest level since Jan 29, 2007, and sagging metals prices pressured the Canadian dollar. [ID:nSP373294]
"It's massive flight-to-safety buying, generally viewed as Treasuries, because of growing fears of a deep, global recession," said Sal Guatieri, senior economist, BMO Capital Markets.
"Investors generally believe that the global economy is slipping into a deep recession, and because of that they're buying up Treasuries and selling off the commodity-linked currencies," he added.
"Until they see evidence that things are improving those trends could persist."
The Canadian currency bounced around in a range of C$1.2110 to the U.S. dollar, or 82.58 U.S. cents, to C$1.2385 to the U.S. dollar, or 80.74 U.S. cents.
BONDS PRICES RALLY
Canadian bond prices were mostly higher as skidding equity markets stoked the bid for safe-haven government debt, adding to some pent-up demand due to Tuesday's bond market holiday.
Bond markets were closed on Tuesday for Remembrance Day in Canada and Veterans Day in the United States, forcing dealers to wait until Wednesday to load on more more secure debt.
"It's the risk-aversion trade," said Sheldon Dong, fixed income analyst, TD Waterhouse Private Investment.
"Bonds are pretty much reacting to developments in the stock markets and stock markets are basically showing an aversion to risk again."
The two-year bond was up 15 Canadian cents at C$101.80 to yield 1.849 percent. The 10-year bond was up 53 Canadian cents at C$104.76 to yield 3.654 percent.
The yield spread between the two- and 10-year bond was 186 basis points, up from 179 basis points at the previous close.
The 30-year bond was down 5 Canadian cents to C$112.60 to yield 4.235 percent. In the United States, the 30-year Treasury yielded 4.175 percent. (Editing by Peter Galloway)