CANADA FX DEBT-C$ stuck as weak housing data keeps pressure on

* Canadian dollar at C$1.2595 to the greenback, or 79.40
    * Bond prices higher across the maturity curve

    TORONTO, March 9 (Reuters) - The Canadian dollar was stuck
around C$1.26 to its U.S. counterpart on Monday after a retreat
at the end of last week, with a sharp fall in housing starts
keeping the pressure on the currency.
    The seasonally adjusted house-building metric fell short of
expectations, a move that may have been aggravated by severe
winter weather. 
    "The disappointment today in housing starts is indicative of
overall concerns on the slowing of the pace of the housing
market," said Greg Moore, senior currency strategist at Royal
Bank of Canada.
    In North American morning trade the Canadian dollar 
was at C$1.2595 to the greenback, or 79.40 U.S. cents, slightly
stronger than Friday's close of C$1.2610, or 79.30 U.S. cents.
    Moore says the currency could weaken to C$1.34 this year on
further resource price weakness and monetary policy divergence.
Canada is a major oil producer, and its central bank cut rates
in January while the U.S. Federal Reserve is looking to hike.
    He said such a move would encounter stiff resistance around
the C$1.30 level touched during the 2008 financial crisis.    
    Canadian government bond prices were higher across the
maturity curve, with the two-year up 7.5 Canadian
cents to yield 0.586 percent and the benchmark 10-year
 up 53 Canadian cents to yield 1.557 percent.

 (Reporting by Alastair Sharp Editing by W Simon)