CANADA FX DEBT-C$ posts 6-week high as exports rise ahead of BoC decision

    TORONTO, Dec 5 (Reuters) - The Canadian dollar strengthened
to a six-week high against its U.S. counterpart on Tuesday after
data showed a rebound in the country's exports one day before an
interest rate decision by the Bank of Canada.
    Canada's trade deficit narrowed to C$1.47 billion in October
from a revised C$3.36 billion in September as exports increased
after four consecutive monthly declines. Economists had forecast
a deficit of C$2.70 billion.             
    "This report, combined with last week's stellar employment
report, will be looked favorably upon by the data dependent Bank
of Canada," said Dina Ignjatovic, an economist at TD Bank in a
research note.
    Data on Friday showed that Canada's economy added nearly
80,000 jobs in November.
    Still, economists expect the Bank of Canada to leave its
benchmark interest rate on hold at 1 percent on Wednesday due to
a number of uncertainties that could affect the domestic
economy, including renegotiation of the North American Free
Trade Agreement.
    The central bank raised rates in July and September for the
first time in seven years.
    At 9:36 a.m. ET (1436 GMT), the Canadian dollar          was
trading at C$1.2661 to the greenback, or 78.98 U.S. cents, up
0.1 percent.
    The currency touched its strongest since Oct. 24 at
    The loonie advanced despite a drop in the price of oil, one
of Canada's major exports.
    U.S. crude        prices were down 0.12 percent at $57.4 a
barrel as investors took profits in the wake of a pact by major
producers to extend output cuts.             
    Canadian government bond prices were lower across the yield
curve, with the two-year            down 0.5 Canadian cent to
yield 1.553 percent and the 10-year             falling 5
Canadian cents to yield 1.931 percent.
    The gap between Canada's 2-year yield and its U.S.
equivalent widened by 4.2 basis points to a spread of -27 basis
points, as gains on Wall Street helped underpin U.S. Treasury

 (Reporting by Fergal Smith; Editing by David Gregorio)