CANADA FX DEBT-C$ closes lower as oil skids

* Canadian dollar hits two-week low

* Slide in oil blamed for weak currency

* Bond prices mostly higher as stocks selloff

By Jennifer Kwan

TORONTO, Nov 12 (Reuters) - The Canadian dollar closed
lower versus the U.S. dollar on Wednesday as a steep slide in
the price of crude and falling metals prices pushed the
currency to its lowest level in two weeks.

Bond prices were mostly higher as investors sought safety
amid a broad selloff in equity markets. Bond markets in Canada
and the United States were closed on Tuesday.

The Canadian currency was at C$1.2374 to the U.S. dollar,
or 80.81 U.S. cents, down from C$1.2050 to the U.S. dollar, or
82.99 U.S. cents, at Tuesday's close.

Weakness in the price of crude, which settled at $56.16 a
barrel, its lowest level since Jan 29, 2007, and sagging metals
prices pressured the Canadian dollar. [ID:nSP373294]

"It's massive flight-to-safety buying, generally viewed as
Treasuries, because of growing fears of a deep, global
recession," said Sal Guatieri, senior economist, BMO Capital
Markets.

"Investors generally believe that the global economy
is slipping into a deep recession, and because of that they're
buying up Treasuries and selling off the commodity-linked
currencies," he added.

"Until they see evidence that things are improving those
trends could persist."

The Canadian currency bounced around in a range of
C$1.2110 to the U.S. dollar, or 82.58 U.S. cents, to C$1.2385
to the U.S. dollar, or 80.74 U.S. cents.

BONDS PRICES RALLY

Canadian bond prices were mostly higher as skidding equity
markets stoked the bid for safe-haven government debt, adding
to some pent-up demand due to Tuesday's bond market holiday.

Bond markets were closed on Tuesday for Remembrance Day in
Canada and Veterans Day in the United States, forcing dealers
to wait until Wednesday to load on more more secure debt.

"It's the risk-aversion trade," said Sheldon Dong, fixed
income analyst, TD Waterhouse Private Investment.

"Bonds are pretty much reacting to developments in the
stock markets and stock markets are basically showing an
aversion to risk again."

The two-year bond was up 15 Canadian cents at C$101.80 to
yield 1.849 percent. The 10-year bond was up 53 Canadian cents
at C$104.76 to yield 3.654 percent.

The yield spread between the two- and 10-year bond was 186
basis points, up from 179 basis points at the previous close.

The 30-year bond was down 5 Canadian cents to C$112.60 to
yield 4.235 percent. In the United States, the 30-year Treasury
yielded 4.175 percent.
(Editing by Peter Galloway)