* Canadian dollar at C$1.2577 or 79.51 U.S. cents
* Ten-year bond yield at record low
(Adds details, quotes, updates prices)
TORONTO/OTTAWA, Feb 2 (Reuters) - The Canadian dollar gained
more than 1 percent against the greenback on Monday as a jump in
oil prices gave the currency a reprieve from the heavy selling
it has seen over the past month.
The relief was likely to be short-lived, however, as
analysts expect the still-low price of oil and an accommodative
central bank at home to continue to weigh on the loonie.
Canada is a major oil producer and the currency has tracked
the dramatic slide in crude prices over the last half year. The
drop in the loonie intensified after a surprise interest rate
cut by the Bank of Canada last month and the currency shed 8.7
percent in January, making for its worst month since the onset
of the financial crisis in October 2008.
Bets that crude may have found a bottom helped U.S. crude
settle up $1.33 at $49.57 a barrel on Monday, providing
support for the Canadian dollar which had touched a nearly
six-year low on Friday.
While the bounce in oil shook some of the less secure long
U.S. dollar-Canadian dollar positions out of the market, "we
haven't seen a fundamental shift in economic indicators that
would really lead us to believe we're at a turning point for the
pair," said Scott Smith, senior market analyst at Cambridge
Mercantile Group in Calgary.
"I don't think C$1.30 is out of the question at this point,
I think that's the target most people are starting to look for,"
said Smith.
The Canadian dollar ended the North American
session at C$1.2577 to the greenback, or 79.51 U.S. cents,
significantly stronger than Friday's close of C$1.2711, or 78.67
U.S. cents. It was only the second session out of the past 10
that the Canadian dollar has gained ground.
Canadian trade data for December and January employment
figures on both sides of the border this week will be key areas
of focus for market participants seeking further direction.
Canadian government bond yields were mostly lower, with the
benchmark 10-year at a record low 1.237 percent, up
13 Canadian cents in price. The two-year was down 1
Canadian cent to yield 0.395 percent.
(Reporting by Solarina Ho and Leah Schnurr; Editing by James
Dalgleish)