CANADA FX DEBT-C$ weakens as oil retreats, export volumes fall

(Adds strategist comment, updates prices to close)
    * Canadian dollar settles at C$1.3284, or 75.28 U.S. cents
    * Bond prices mixed across steeper yield curve

    By Alastair Sharp
    TORONTO, Dec 6 (Reuters) - The Canadian dollar weakened
slightly against its U.S. counterpart on Tuesday as oil fell for
the first time in a week and domestic trade data showed a
disappointing drop in export volumes.
    The currency had gained recently as oil surged after a deal
among producers to limit output, and could yet test its 100-day
moving average of C$1.3192, according to Elsa Lignos, a senior
currency strategist at RBC Capital Markets in New York.
    "That would be a good opportunity to enter long-term
positions," she said, as slack in the domestic economy and weak
exports look set to weigh on the currency over the medium term.
    The Canadian dollar settled at C$1.3284 to the
greenback, or 75.28 U.S. cents, weaker than Monday's close of
C$1.3276, or 75.32 U.S. cents.
    "Markets could be pricing in risks of (Bank of Canada
interest rate) cuts in 2017 as the Fed is hiking," Lignos said,
adding that the risk of U.S. President-elect Donald Trump
enacting protectionist trade policies was a further headwind.
    Canada's long-suffering export sector, which the Bank of
Canada says is a cause for concern, turned in a sluggish
performance in October despite a low Canadian dollar and a
strengthening U.S. economy, Statistics Canada data showed.
    The Bank of Canada is widely expected to hold interest rates
at 0.50 percent on Wednesday, with investors focused on the
policy statement for any mention of how Trump's U.S. election
victory could affect the Canadian and U.S. economies.
    Prices fell for oil, one of Canada's major exports, as data
showed output rose for most major producers despite plans for
curbs by the Organization of the Petroleum Exporting Countries
and Russia. 
    After rising over 15 percent over four sessions since the
Nov. 30 OPEC meeting, Brent futures lost $1.01, or 1.8
percent, to settle at $53.93 a barrel, while U.S. crude futures
 fell 86 cents, or 1.7 percent, to $50.93.
    The Canadian currency's strongest level of the session was
C$1.3253, while its weakest was C$1.3311.
    On Monday, the loonie reached a more than six-week peak
against the greenback at C$1.3236.
    Canadian government bond prices were mixed across a steeper
yield curve, with the two-year price up 4 Canadian
cents to yield 0.721 percent and the benchmark 10-year
 slipping 5 Canadian cents to yield 1.634 percent.
    On Thursday, the 10-year yield touched its highest in more
than one year at 1.712 percent.

 (Additional reporting by Fergal Smith; Editing by James