CANADA FX DEBT-C$ weaker after manufacturing sales tumble

* Canadian dollar at C$1.2332 or 81.09 U.S. cents
    * Bond prices higher across the maturity curve

    OTTAWA, June 15 (Reuters) - The Canadian dollar weakened
against the greenback on Monday, after data showed domestic
factory sales fell much more than expected in April.
    The loonie was also pressured by modest strength in the U.S.
dollar as investors were turning their attention to the Federal
Reserve's policy meeting later this week.
    * At 9:38 a.m. ET (1338 GMT), the Canadian dollar 
was trading at C$1.2332 to the greenback, or 81.09 U.S. cents,
softer than the Bank of Canada's official close of C$1.2311, or
81.23 U.S. cents.
    * The currency's strongest level of the session was
C$1.2301, while its weakest level was C$1.2361.
    * Canadian manufacturing sales dropped 2.1 percent in April,
 the third decline in four months, on lower sales of food and
aerospace products and parts. 
    * While the Federal Reserve is expected to keep interest
rates on hold this week, investors will be looking for a clear
signal of when the central bank will start to raise rates from
their historic lows. Analysts said markets could trade
cautiously until then. 
    * U.S. crude prices were down 1.13 percent to $59.28
a barrel, while Brent crude lost 1.83 percent to $62.70
a barrel. 
    * Canadian government bond prices were higher across the
maturity curve, with the two-year price up 6.5
Canadian cents to yield 0.619 percent and the benchmark 10-year
 rising 53 Canadian cents to yield 1.75 percent.
    * The Canada-U.S. two-year bond spread was -7 basis points,
while the 10-year spread was -57.8 basis points.


 (Reporting by Leah Schnurr; Editing by Meredith Mazzilli)