* C$ hits two-week low of 99.69 U.S. cents
* Bonds weaker across the curve
* China, U.S. data weigh; Canadian data shrugged off
TORONTO, Jan 20 (Reuters) - The Canadian dollar fell below parity with the greenback on Thursday to its lowest level in more than two weeks after data showing stronger-than-expected growth in China spurred fears of tighter monetary policy in the Asian giant, a key market for Canadian resources.
Chinese economic growth soared past forecasts to rise by 9.8 percent in the fourth quarter and inflation slowed less than expected, prompting a sell-off in global equities and commodities, such as oil, which hurt Canada's resource-linked currency. [MKTS/GLOB]
Also, a round of stronger-than-expected U.S. data pushed up the U.S. dollar at the expense of the Canadian currency. U.S. jobless claims showed the biggest drop in nearly a year, and U.S. home resales jumped more than expected in December. The data rekindled the view of an overall strengthening of the U.S. economy. [ID:nN20105802]
At 11:45 a.m. (1645 GMT), the Canadian dollarwas at C$1.0008 to the U.S. dollar, or 99.92 U.S. cents, down from Wednesday's North American finish of C$0.9955 to the U.S. dollar, or $1.0045.
"We've got a general risk-aversion feel that's going through markets," said David Watt, senior currency strategist at RBC Capital Markets.
"The Canadian dollar was already flirting just below parity before the U.S. data came out. Even though we got some fairly good data coming out of Canada it seems to be that the data out of the U.S. was a little bit more of a dominant factor."
Statistics Canada said wholesale trade rose 1.2 percent in November, advancing for the fourth month in a row, while the composite leading indicator rose 0.5 percent in December. Both indicators beat expectations. [ID:nN2083816]
The Canadian dollar hit a low of C$1.0031 against its U.S. counterpart, or 99.69 U.S. cents -- its weakest level since Jan. 4 and just a few ticks from its lowest point of 2011 at C$1.0035 to the U.S. dollar, or 99.65 U.S. cents.
Weak North American equity markets and a slump in the price of crude oil also put pressure on the risk-based Canadian dollar.
The currency's one-for-one footing with the U.S. dollar started to falter on Tuesday when dovish language by the Bank of Canada in its interest-rate statement raised some doubts about the timing of the next rate hike. [ID:nN18138776]
"We've seen a significant move in the interest rate spreads between Canada and the U.S. and that combined with fears over Chinese tightening monetary policy and how that would impact growth and commodities is weighing on the Canadian dollar this morning," said Camilla Sutton, chief currency strategist at Scotia Capital.
"Reasonably, we're hovering either side of parity for the next little bit as we await the next catalyst to take Canada another leg stronger."
Canadian government bond prices were pressured across the curve, tracking U.S. Treasuries, after the U.S. data.
The two-year bondwas down 5 Canadian cents to yield 1.720 percent, while the 10-year bond lost 45 Canadian cents to yield 3.287 percent. (Additional reporting by Claire Sibonney; editing by Peter Galloway)
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