CANADA FX DEBT-C$ weakens with focus on Fed policy path
* C$ at C$1.0498 vs US$, or 95.26 U.S. cents * Bond yields mixed across the maturity curve By Leah Schnurr TORONTO, Nov 14 (Reuters) - The Canadian dollar weakened against the greenback on Thursday, retreating from overnight gains as earlier optimism that the U.S. Federal Reserve will remain accommodative for some time wore off. Investors had their attention focused on the U.S. Senate Banking Committee hearing scheduled for 10:00 a.m. EST (1500 GMT) on the nomination of the Fed's current vice chair, Janet Yellen, to head the U.S. central bank. In prepared remarks released on Wednesday, Yellen offered a defense of the Fed's economic stimulus efforts, supporting market expectations the central bank may not start to reduce its bond buying until next year. "The broad consensus is that Yellen has the same mindset as Bernanke, if not possibly a little more dovish on the economy," said Scott Smith, senior market analyst at Cambridge Mercantile Group in Calgary. Still, those dovish expectations are well priced into the market at this point, said Smith. "We saw a little bit of a jump in risk-correlated assets overnight with her prepared testimony, but to some extent that didn't materially change the view of the broader market, so we've seen some give back this morning." The Canadian dollar is seen benefiting from continued quantitative easing as it boosts appetite for risk assets and dampens demand for the U.S. dollar. The Canadian dollar gave back the previous session's strong advance and was at C$1.0498 to the greenback, or 95.26 U.S. cents, weaker than Wednesday's close of C$1.0462, or 95.58 U.S. cents. The loonie's reaction to domestic economic data was muted after Canada's trade deficit in September dropped by more than half as exports grew at a much faster rate than imports. The two-year bond was up half a Canadian cent to yield 1.106 percent, while the benchmark 10-year bond slipped 6 Canadian cents to yield 2.587 percent.