CANADA FX DEBT-C$ firms but ends weakest year since 2008

* Canadian dollar at C$1.0636 or 94.02 U.S. cents
    * Bond prices lower across the maturity curve

    By Leah Schnurr
    TORONTO, Dec 31 (Reuters) - The Canadian dollar rose
slightly against the greenback on Tuesday, even as it was
closing out its weakest year since 2008,  with analysts
expecting a dovish Bank of Canada will spell more pressure for
the currency next year.
    Trading was light heading into the New Year's Day holiday
and with no domestic economic data on tap until later in the
    South of the border, data showed U.S. home price gains
slowed in October, while consumers' moods improved this month,
though the reports had little impact on the loonie.
    But traders were mostly focused on the year ahead. Sentiment
has turned bearish against the Canadian dollar in recent months
as the Bank of Canada shifted to a more neutral stance, which
has markets expecting interest rates will stay low for longer.
    The gradual unwinding of the U.S. Federal Reserve's economic
stimulus is also expected to weigh on the Canadian currency next
    "The loonie has been pretty battered over the course of
2013," said Scott Smith, senior market analyst at Cambridge
Mercantile Group in Calgary. 
    "It looks like there's not a lot that's going to be coming
up in the first half of next year that we really see the loonie
gaining back any of that strength." 
    Smith sees the Canadian dollar weakening further in
the first half of 2014 but said the currency should get a
reprieve in the latter half of the year as Canada starts to
benefit from a pick-up in the U.S. economic recovery.
    The Bank of Canada's official closing rate for the currency
on Tuesday was C$1.0636 to the greenback, or 94.02 U.S. cents,
slightly stronger than Monday's close of C$1.0640, or 93.98 U.S.
    It was the worst year for the Canadian currency since the
global financial crisis in 2008, with the greenback appreciating
by more than 7 percent against the loonie, according to Thomson
Reuters data.
    "I would anticipate that next year, as the markets come back
in and load into the preferred trades, that long U.S.
dollar-Canada is going to be one of them," said Greg Anderson,
global head of foreign exchange strategy BMO Capital Markets in
New York.
    Anderson sees the Canadian dollar falling below C$1.07 in
early January and potentially as far as the C$1.0850 and C$1.09
range "on the back of the Fed doing another round of tapering in
late January and the Bank of Canada sitting on their hands."
    A Reuters poll in early December found forecasters expected
the Canadian dollar to weaken to C$1.08 in the coming year.
    Canadian government bond prices were lower across the
maturity curve, with the two-year off 1 Canadian cent
to yield 1.135 percent and the benchmark 10-year 
down 27 Canadian cents to yield 2.774 percent.
    The bond market closed early ahead of Wednesday's holiday.