* Canadian dollar at C$1.4138 or 70.73 U.S. cents
* Bond prices lower across the maturity curve
TORONTO, Jan 26 (Reuters) - The Canadian dollar rallied
against its U.S. counterpart on Tuesday, helped by a recovery in
oil prices on hopes of a deal to address a global crude supply
glut.
A 6 percent slump in Chinese shares weighed on market
sentiment but was offset by firmer oil prices.
Oil rose further above $30 a barrel, lifted by hopes that
OPEC and non-OPEC producers may be edging closer to a deal to
tackle one of the biggest supply gluts in decades.
U.S. Federal Reserve policymakers meet on Tuesday and
Wednesday for the first time since raising interest rates in
December. While no move is expected, investors will parse their
statement to see how recent events have influenced the central
bank's outlook.
At 9:10 a.m. EST (1410 GMT), the Canadian dollar CAD=D4
was trading at C$1.4138 to the greenback, or 70.73 U.S. cents,
stronger than Monday's official close of C$1.4270, or 70.08 U.S.
cents.
The currency's strongest level of the session was C$1.4137,
while its weakest level was C$1.4326.
The currency rallied 3 percent last week after the Bank of
Canada surprised many traders by leaving its policy rate on
hold. On Friday, it touched its strongest level since Jan. 11 at
1.4115.
Canadian government bond prices were lower across the
maturity curve as the rise in crude oil prices supported the
domestic economic outlook.
The two-year CA2YT=RR price was down 2.5 Canadian cents to
yield 0.42 percent and the benchmark 10-year CA10YT=RR fell 12
Canadian cents to yield 1.257 percent.
The Canada-U.S. 10-year bond spread was 2.4 basis points
less negative at -75.3 basis points as Canadian government bonds
underperformed.
Canadian gross domestic product for November is awaited on
Friday, expected to reveal a rebound in growth after contraction
in October.