* C$ rises to 93.81 U.S. cents as oil climbs
* Currency ends week down 0.6 pct
* Bonds fall across the curve
TORONTO, Dec 18 (Reuters) - Canada's dollar ended higher against the U.S. currency on Friday thanks to stronger oil prices, recovering from the previous session when investors took risk off the table.
Oil, a key Canadian export, finished the session higher, boosting the appeal of the Canadian dollar. The price of oil held higher above $73 a barrel after an incursion by Iranian troops into an Iraqi oilfield sparked tensions, and on the prospect of increased winter demand. [O/R][ID:nLDE5BH167]
"The fundamentals in Canada are strong. There's minimal sovereign risk and the bias is still one that is positive-Canada in terms of sentiment," said Camilla Sutton, a currency strategist at Scotia Capital.
The Canadian dollar ended at C$1.0660 to the U.S. dollar, or 93.81 U.S. cents, up from Thursday's finish at C$1.0703 to the U.S. dollar, or 93.43 U.S. cents. The currency, which has faced a resurgent greenback in recent days, ended the week down 0.6 percent.
Earlier in the session, the government said weaker tax revenues and emergency spending measures to rescue the economy from recession nudged Canada's budget deficit to C$3.30 billion in October, compared with a C$592 million deficit in the same month last year.
But Ottawa said it expects much of the deficit to disappear when the economic recovery boosts tax intake and its extraordinary spending measures end. [ID:nOTW002487]
Canadian wholesale trade figures for October, which came in below expectations, had little impact on the currency. [ID:nN18]
Government debt fell alongside U.S. bonds as investors pocketed profits after Thursday's safe-haven rally.
The two-year government bondfell 5 Canadian cents to C$99.89 to yield 1.308 percent, while the 30-year bond shed 72 Canadian cents to C$116.40 to yield 4.009 percent.
Canadian bonds outperformed U.S. notes, with the 10-year yield spread widening to 14.1 basis points below its U.S. counterpart from 11.6 basis points the previous session.
Next week, investors will likely deal with lower volumes and year-end flows, which may make currency and bond markets vulnerable to large swings.
The Canadian data calendar is light but the information is substantial with October statistics due for retail sales and monthly gross domestic product. (Reporting by Ka Yan Ng; editing by Rob Wilson)
Our Standards: The Thomson Reuters Trust Principles.