CANADA FX DEBT-C$ dives to 5-1/2 year low as U.S. crude sinks below $48

* Canadian dollar ends at C$1.1828 or 84.55 U.S. cents
    * Bond prices higher across the maturity curve

    By Solarina Ho
    TORONTO, Jan 6 (Reuters) - The Canadian dollar marked its
weakest close against its U.S. counterpart since May 2009 on
Tuesday, undercut by crude prices that were beaten down for a
fourth straight session on deepening concerns about excess
supply around the world.
    Crude prices have fallen nearly 10 percent this week,
hitting fresh 5-1/2 year lows as Saudi Arabia cut selling prices
to Europe and major producers showed no signs of scaling back
production despite a supply glut. U.S. prices closed at $47.93 a
barrel on Tuesday. 
    Canada is a major oil exporter and its currency has been
pummeled alongside crude prices, which have plummeted more than
50 percent over the past six months.
    "I think it's a general flight-to-quality story into the
U.S. market ... The oil story does make it a more challenging
environment for the Canadian dollar," said David Tulk, chief
Canada macro strategist at TD Securities.
    "(It adds) to the fears that the only way the Canadian
economy can do well is if the currency keeps pace with the
weakness in the price of oil."
    The Canadian dollar, which lost about 9 percent
last year largely on oil, ended at C$1.1828 to the U.S. dollar,
or 84.55 U.S. cents, weaker than Monday's Bank of Canada close
of C$1.1749, or 85.11 U.S. cents.
    The loonie was also underperforming most other major
    Jeremy Stretch, head of foreign exchange strategy at CIBC
World Markets in London, said the loonie could retreat as far as
C$1.1950 to the greenback in the very near term as investors
cast their eye toward key economic data this week, including
Canada's trade balance for November, which is due on Wednesday,
and Canadian and U.S. employment data for December on Friday.
    Canadian government bond prices were higher across the
maturity curve, with the two-year up 5 Canadian cents
to yield 0.956 percent and the benchmark 10-year 
climbing 47 Canadian cents to yield 1.637 percent.

 (Editing by Peter Galloway)