CANADA FX DEBT-Canada $ pulled to four-month low after Iran deal

* C$ at C$1.0555 vs US$, or 94.74 U.S. cents
    * Loonie falls as Iran deal weighs on oil prices
    * Bond prices mostly lower across the curve

    By Leah Schnurr
    TORONTO, Nov 25 (Reuters) - The Canadian dollar weakened
against the greenback on Monday as a deal reached over the
weekend to curb Iran's nuclear program drove oil prices lower.
    The Canadian dollar touched a more than four-month low in
the overnight session, extending last week's weakness after a
tame inflation report and comments from the head of the Bank of
Canada underscored market expectations that interest rates will
be kept low for some time. 
    Iran and six world powers struck a deal on Sunday under
which Tehran is to limit its nuclear energy program in exchange
for initial relief from international trade and financial
    The deal sent oil prices lower with U.S. crude futures
 down $1.12 to $93.72 a barrel. Canada is a major oil
exporter, making its currency sensitive to fluctuations in oil
    "The assault on the 'loonie' is continuing from last week
with the fresh bout of weakness seen this morning sparked by the
Iranian nuclear deal reached over the weekend," said Scott
Smith, senior market analyst at Cambridge Mercantile Group in
    "That's acted as a pretty big weight this morning on energy
and the negative spill-over effects of that are having investors
shed exposure to the Canadian dollar and other commodity-linked
    The Canadian dollar was at C$1.0555 versus the U.S.
dollar, or 94.74 U.S. cents, weaker than Friday's close of
C$1.0524, or 95.02 U.S. cents. The loonie hit a low of C$1.0584
over night, its lowest since early July.
    The lows the currency hit in July just above C$1.06 could
act as a cap, while the low C$1.05 area is the next likely place
for support, said Smith.
    The domestic economic calendar is light this week and
trading could be quieter heading into the U.S. Thanksgiving
holiday on Thursday. 
    Focus will be on Friday's Canadian gross domestic product
report, with growth in the third quarter forecast to pick up to
a 2.5 percent annualized rate. 
    Canadian bond prices were mostly lower across the maturity
curve, with the two-year bond off 1 Canadian cent to
yield 1.110 percent, while the benchmark 10-year bond
 was down 10 Canadian cents to yield 2.589 percent.