CANADA FX DEBT-C$ firms on weak U.S. data, oil bounce

(Adds quote, closing figures, details)
    * Canadian dollar at C$1.1945 or 83.72 U.S. cents
    * Bond prices higher across the maturity curve
    * 10-year bond yield falls to record low

    By Solarina Ho
    TORONTO, Jan 14 (Reuters) - The Canadian dollar strengthened
marginally against its U.S. counterpart on Wednesday as crude
prices ended a four-day retreat, while the greenback weakened on
softer-than-expected U.S. retail sales data.
    Retail sales in the United States fell 0.9 percent in
December as demand fell almost right across the board. It was
the largest decline in 11 months. 
    Crude prices, the biggest driver for the Canadian dollar in
recent months, had their biggest daily percentage gain since the
summer of 2012 as investors ignored oversupply worries and
bought ahead of options expiration. Brent crude climbed 4.5
percent, while U.S. crude jumped 5.6 percent. 
    As Canada is a major oil exporter, the loonie has moved in
tandem with crude prices, which have plunged nearly 60 percent
since June. Despite Wednesday's gains, oil prices remained near
six-year lows.
    The Canadian dollar closed at C$1.1945 to the U.S.
dollar, or 83.72 U.S. cents, modestly firmer than Tuesday's
close of C$1.1954, or 83.65 U.S. cents.
    The loonie cracked the key C$1.20 level earlier in the
session, its weakest since April 2009.
    "The fact that a lot of the fundamentals justify this trend
lower in the Canadian dollar means that we will eventually get
sustainably above (C$1.20)," said Greg Moore, senior currency
strategist at Royal Bank of Canada.
    Traders were also anticipating the Bank of Canada's monetary
policy report next week. They hope to hear further details from
the bank on its view of the impact of cheap oil on the Canadian
    "Everything signals that you'll have a relatively big
divergence between monetary policy in Canada and the United
States and that should further drive the Canadian dollar lower,"
said Charles St-Arnaud, a senior economist and strategist at
Nomura Securities, adding the currency could hit C$1.25 by
    Canadian government bond prices were higher across the
maturity curve, with the two-year up 5.5 Canadian
cents to yield 0.889 percent and the benchmark 10-year
 jumping 23 Canadian cents to yield 1.575 percent.
Yields on the 10-year bond dropped to a record low during the

 (Additional reporting by Alastair Sharp; Editing by Peter