* Canadian dollar at C$1.3542 or 73.84 U.S. cents
* Bond prices higher across the maturity curve
By Solarina Ho
TORONTO, Dec 29 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Thursday, as oil prices held steady and the greenback slipped in tandem with U.S. bond yields.
The U.S. dollar extended its late fall in the previous session after data showed contracts to buy previously owned U.S. homes fell to their lowest level in nearly a year. oil at $54 a barrel and U.S. interest rates drifting a little bit lower over the last week, I don't think USD/CAD belongs above $1.35," said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York.
At 10:05 a.m. ET (1505 GMT), the Canadian dollar CAD=D4 was trading at C$1.3542 to the greenback, or 73.84 U.S. cents, firmer than the Bank of Canada's official close of C$1.3555, or 73.77 U.S. cents.
The currency's weakest level of the session was C$1.356, while it touched its strongest level since Monday at C$1.3503.
"I think today, tomorrow, we'll continue that (strength) and finish the year below $1.35," Anderson said.
U.S. crude CLc1 prices were down 0.24 percent to $53.93 a barrel, while Brent crude LCOc1 added 0.30 percent to $56.39 in thin year-end holiday trading. O/R
Both crude oil benchmarks have made big gains this month since OPEC and other producers agreed to curb production in an attempt to balance an over-supplied market.
Canadian government bond prices were mostly higher across the maturity curve, with the two-year CA2YT=RR price flat to yield 0.779 percent and the benchmark 10-year CA10YT=RR rising 2 Canadian cents to yield 1.734 percent.
The Canada-U.S. two-year bond spread was -46.7 basis points, while the 10-year spread was -75.9 basis points.