CANADA FX DEBT-C$ weakens ahead of Fed as greenback recovers

* Canadian dollar at C$1.3075, or 76.48 U.S. cents
    * Bond prices lower across the yield curve

    TORONTO, Feb 1 (Reuters) - The Canadian dollar weakened on
Wednesday against its U.S. counterpart, which recovered some
recent lost ground ahead of an interest rate decision from the
U.S. Federal Reserve.
    Stronger-than-expected U.S. private payroll data helped
support the U.S. dollar, which strengthened against a
basket of major currencies. It follows the worst start to the
year in three decades for the greenback on concerns that the
United States was poised to ditch its two-decade-old "strong
dollar" policy. 
    Policy uncertainty only added to expectations that the Fed
will keep interest rates steady on Wednesday. But the central
bank may reinforce the risk of higher inflation, which could
weigh on the Canadian dollar against the greenback. 
    Bank of Canada Governor Stephen Poloz reiterated on Tuesday
that the firmer Canadian dollar was a headwind for the export
sector, where growth has not been as strong as the bank
    The loonie rose 3.2 percent in January after climbing 3.1
percent in 2016. On Tuesday, it touched its strongest level
since Sept. 9 at C$1.2969, helped by data that showed the
economy expanded at a faster-than-expected pace in November.
    At 9:22 a.m. ET (1422 GMT), the Canadian dollar was
trading at C$1.3075 to the greenback, or 76.48 U.S. cents,
weaker than Tuesday's official close of C$1.3012, or 76.85 U.S.
    The currency was trading in a range of C$1.3032 to C$1.3093.
    Losses for the loonie came even as prices of oil, one of
Canada's major exports, rose on signs that Russia and
Organization of the Petroleum Exporting Countries producers are
delivering on promised supply reductions. 
    U.S. crude was up 0.97 percent at $53.32 a barrel.
    Factories across the world fired up, or at least kept up
activity, in January. Some countries registered multiyear highs
in output, just as a barrage of political risks threatens the
global economy with potential harm. 
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries as the U.S. payrolls data
    The two-year dipped 2.5 Canadian cents to yield
0.784 percent, and the 10-year declined 25 Canadian
cents to yield 1.787 percent.

 (Reporting by Fergal Smith; Editing by Lisa Von Ahn)