* Canadian dollar at C$1.0851 or 92.16 U.S. cents * Bond prices higher across the maturity curve By Leah Schnurr TORONTO, Jan 9 The Canadian dollar weakened to hit a more than four-year low against the greenback on Thursday as a recent sell-off continued unabated, reinforcing expectations the currency will be in for a rocky 2014. Investors digested a round of domestic housing data, which showed building permits fell more than expected, as did housing starts, while home prices were unchanged. At the same time, first-time claims for U.S. unemployment benefits declined more than expected last week. "That contrast - better U.S. data versus middling Canadian data - bodes well for the U.S. dollar and is not so good for the Canadian dollar," said Benjamin Reitzes, senior economist at BMO Capital Markets in Toronto. The Canadian dollar has fallen for four straight sessions as bearish sentiment against the loonie has grown. A dovish Bank of Canada and the gradual unwinding of the Federal Reserve's bond purchases are expected to weigh on the currency. The most recent drop was sparked by data earlier in the week that showed a steep widening of Canada's trade deficit, while the U.S. trade deficit fell to its lowest in four years. The Canadian dollar was at C$1.0851 to the greenback, or 92.16 U.S. cents, weaker than Wednesday's close of C$1.0804, or 92.56 U.S. cents. The loonie hit a session low of C$1.0872, its lowest since October 2009. "It's tough to stop this momentum once you get going," said Reitzes. "The market gets its mind made up and wants the (U.S.) dollar higher and that's the way it's going to go." Technical resistance for the U.S. dollar-Canadian dollar should lie at C$1.09 and C$1.1235, he said. Investors were looking ahead to unemployment reports due to be released on Friday from Canada and the United States. The Canadian economy is forecast to have added 14,600 jobs in December, though that is down from 21,600 the previous month. The unemployment rate is seen holding steady at 6.9 percent. Analysts say that a number that comes in significantly below market expectations could put further pressure on the loonie. Canadian government bond prices were higher across the maturity curve, with the two-year up 2 Canadian cents to yield 1.102 percent and the benchmark 10-year was up 13 Canadian cents to yield 2.704 percent.