* C$ unable to add to gains from prior session
* Global economic concerns weigh on investor sentiment
* Bonds hold steady ahead of Bernanke testimony
By Frank Pingue
TORONTO, Nov 18 (Reuters) - The Canadian dollar weakened against the U.S. dollar on Tuesday as the growing prospect of a deep global recession forced an unwinding of gains recorded by the currency the previous session.
Domestic bond prices, with no Canadian data to influence direction, were mostly unchanged alongside the larger U.S. debt market as dealers awaited testimony from Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson.
At 10:15 a.m. (1515 GMT), the Canadian unit was at C$1.2255 to the U.S. dollar, or 81.59 U.S. cents, down from C$1.2232 to the U.S. dollar, or 81.75 U.S. cents, at Monday's close.
Further evidence that the global economy is suffering dealt the latest blow to the Canadian dollar as traders sought out low-yielding assets like the U.S. dollar and yen.
The latest blow came from news on Monday that Citigroup Inc, the No. 2 U.S. bank, planned to cut 52,000 jobs by early next year to help combat sagging economies worldwide.
While the Canadian dollar has been boosted by some pockets of buying interest, its general trend has been to head lower as the global economy weighs on financial markets.
"We run through these phases where for a couple of days it looks like things are improving slightly and people start to hold out hope that maybe we'll see that improvement last for a more pronounced period of time," said George Davis, chief technical strategist at RBC Capital Markets.
"But in general, so far anyway, we haven't really seen any type of sustained bounce in any of the economic data to suggest things are improving on a global basis."
Lower oil prices were also weighing on the Canadian dollar, which often moves roughly in line prices for oil, gas and metal prices due to Canada's vast resources.
Most traders tend to agree that the Canadian dollar will be unable to attract any sustained buying interest until there are clear signs of credit conditions improving and financial flows returning to normal.
Moves in the domestic currency will likely be dictated by global events during Tuesday's session, but domestic events could play a role as the week goes on.
Bank of Canada Governor Mark Carney is scheduled to give a speech to the Canada-United Kingdom Chamber of Commerce early on Wednesday followed by a press conference.
Also, domestic wholesale trade data for September is due on Thursday while October consumer price index data will be released on Friday.
BONDS STEADY
Canadian bond prices were hanging around the break-even level as the lack of any domestic data convinced dealers to take their cue from U.S. markets, where investors were awaiting congressional testimony from Bernanke and Paulson.
Bernanke and Paulson were due to report on the status of the government's $700 billion Troubled Assets Relief Program which is aimed to rescue the U.S. banking industry.
The Canadian overnight Libor rate LIBOR01was 2.5666 percent, up from 2.5000 percent on Monday.
Monday's CORRA rate CORRA= was 2.2370 percent, down slightly from 2.2425 percent on Friday. The Bank of Canada publishes the previous day's rate at around 9 a.m. daily.
The two-year bond dropped 5 Canadian cents to C$101.65 to yield 1.917 percent. The 10-year bond was up 3 Canadian cents at C$105.48 to yield 3.566 percent.
The yield spread between the two-year and 10-year bond was 164 basis points, down from 182 at the previous close.
The 30-year bond added 5 Canadian cents to C$114.10 to yield 4.152 percent. In the United States, the 30-year treasury yielded 4.159 percent.
