* Ends at C$1.0294 per US$, or 97.14 U.S. cents
* C$ ticks 0.14 percent higher for the week
* Lower commodity prices pressure C$
* Bond prices higher (Updates to close, adds quotes)
By Jennifer Kwan
TORONTO, Jan 15 (Reuters) - The Canadian dollar retreated against the U.S. currency on Friday, pressured by lower commodity prices, as the greenback gained broadly on U.S. economic data.
Oil, a key Canadian export, slipped to around $78 a barrel on a stronger U.S. dollar, high inventories and expectations for reduced heating demand in the United States. Gold was also weaker. [O/R] [GOL/]
The U.S. dollar rose across the board on U.S. reports indicating a rise in manufacturing and stable consumer price inflation, while the euro remained pressured by concerns about the Greek economy. [FRX/]
Despite a slightly bearish picture for the Canadian dollar, the commodity-linked currency is still seen as a favorite among investors, currency watchers said.
"We're trading in an inside range today and I don't think that means anything significant in the grander scheme of things. It's just consolidation. We think the trend is still lower for the U.S. dollar," said Shaun Osborne, chief currency strategist at TD Securities.
The Canadian dollar finished at C$1.0294 to the U.S. dollar, or 97.14 U.S. cents, down from Thursday's finish at C$1.0234 to the U.S. dollar, or 97.71 U.S. cents. It edged 0.14 percent higher for the week.
"You've got two divergent forces going on here: you've got the euro selling off, which is causing the U.S. dollar to be bid, and technical levels that have been broken in dollar/Canada that argue for a higher Canadian dollar," said Firas Askari, head of foreign exchange trading at BMO Capital Markets.
On Thursday, the Canadian dollar shot up to C$1.0225 to the U.S. dollar, or 97.80 U.S. cents, its highest intraday level since Oct. 15.
Many traders are now watching the C$1.0207 level. If the currency breaks through this it would be at its highest point since July 2008.
The key event next week will be the Bank of Canada's policy announcement on Tuesday. Most of Canada's primary securities dealers forecast the bank will maintain its conditional promise to keep its key interest rate at the near-zero level through the second quarter. [CA/POLL]
"The market is going to be quite sensitive to any sort of clues that might emerge on rate prospects. But we don't think there's going to be any real pressure on the bank to tighten rates until late this year," said TD's Osborne.
Canadian bond prices were higher and moved in sync with U.S. Treasury issues, which climbed on a tame U.S. inflation report, short-covering after a well-bid 30-year auction on Thursday, and concerns about sovereign risk in Europe. [US/]
"We followed the U.S. The inflation numbers were somewhat benign and stocks are down," said Roger Quick, director of fixed-income research at Scotia Capital.
The two-year Canada bond CA2YT=RR edged 7 Canadian cents higher to C$99.94 to yield 1.283 percent, while the 30-year bond CA30YT=RR climbed 65 Canadian cents to C$115.50 to yield 4.057 percent.
Canadian bonds mostly underperformed U.S. issues, with the 30-year yield 52 basis points below its U.S. counterpart, from from 54 basis points in the previous session. (Editing by Rob Wilson)