CANADA FX DEBT-C$ nears three-year high after GDP data

 * C$ jumps to $1.0281, highest point since Feb. 2008

 * Canada Q4 GDP strong, adds pressure for rate hike

 * Bond prices slide
 (Adds details)

 TORONTO, Feb 28 (Reuters) - The Canadian dollar hit its
highest level since February 2008 on Monday morning after
fourth-quarter GDP data topped expectations and backed
predictions that the Bank of Canada will resume interest rate
hikes in the first half of the year.

 Annualized GDP growth in the quarter was 3.3 percent,
boosted by surging exports and strong consumer spending,
Statistics Canada said. Statscan also revised third-quarter GDP
growth to 1.8 percent from 1.0 percent. Economists polled by
Reuters had expected annualized growth of 3.0 percent in the
fourth quarter. [ID:nSCLSDE79U]

 Bank of Canada Governor Mark Carney had conceded earlier
this month that the bank's January forecast of 2.3 percent
growth in the fourth quarter was likely short of the mark,
suggesting the export strength was a surprise.

 "It's certainly above market expectations, but more
importantly above the BoC's expectations," said Jonathan
Basile, economist at Credit Suisse in New York.

 The Canadian currency CAD=D4 rose as high as C$0.9727 to
the U.S. dollar, or $1.0281, up more than half a penny from its
level just before the data was released, and up from Friday's
North American finish of C$0.9787 to the U.S. dollar, or
$1.0218.

 A second economic report added support, with the export
comeback also helping narrow Canada's current account deficit.
[ID:nN28244157] [ID:nN28244249]

 The GDP figures come one day ahead of a scheduled Bank of
Canada policy announcement, but market operators see little
chance of the central bank lifting interest rates.

 Canadian bond prices were lower across the curve,
particularly in the short-dated issues, as evidence of momentum
in Canada's economic recovery increased the chances of interest
rate hikes later this year.

 The interest rate-sensitive two-year bond CA2YT=RR turned
lower, down 9 Canadian cents to yield 1.824 percent, while the
10-year bond CA10YT=RR fell 13 Canadian cents to yield 3.308
percent.

 Market watchers now expect stronger language on the
economic outlook in the Bank of Canada's commentary on
Tuesday's rate decision, which may lay the groundwork for an
interest rate increase in either April or May.

 "I think we will hear a more two-handed statement from the
Bank of Canada tomorrow, which could set the stage for a rate
hike in coming months," said Sal Guatieri, senior economist at
BMO Capital Markets.

 "(The GDP data) is moving in the right direction,
consistent with an economy that's picking up steam."

 But not all market watchers were convinced that the Bank of
Canada will move quickly on rates.

 "I think it's a good report, stands up to scrutiny, but it
still, in my mind, doesn't change anything for the Bank of
Canada," said Derek Holt, economist at Scotia Capital.

 "I think they're likely to say that we've seen a bit of
growth momentum of late, but we're more concerned about the
developments in global commodities, downside risks to global
growth compared to the last statement."
 (Additional reporting by Solarina Ho; editing by Peter
Galloway)