(Adds strategist comment, details; updates prices)
* Canadian dollar settles at C$1.3738, or 72.79 U.S. cents
* Bond prices higher across the maturity curve
By Alastair Sharp
TORONTO, Dec 14 (Reuters) - The Canadian dollar strengthened
slightly against its U.S. counterpart on Monday after hitting a
fresh 11-1/2-year low as oil prices stumbled further.
While oil reversed course robustly later in the North
American trading session, the Canadian currency was more
circumspect.
"It seems there is a growing voice out there that has this
$40-a-barrel price as a line in the sand where the Canadian
dollar is punished on moves lower and yet doesn't necessarily
rebound on moves higher," said Brad Schruder, director of
foreign exchange sales at BMO Capital Markets.
Brent crude LCOc1 settled at $37.92 after falling as low
as $36.33 a barrel, its weakest since December 2008, while U.S.
crude CLc1 settled up 1.9 percent at $36.31 after earlier
falling to $34.53. O/R
The Canadian dollar CAD=D4 settled at C$1.3738 to the
greenback, or 72.79 U.S. cents, barely stronger than Friday's
close of C$1.3742, or 72.77 U.S. cents.
The loonie's strongest level of the session was C$1.3677,
while it hit its weakest since June 2004 at C$1.3780.
While Schruder said he thinks the loonie's fall since early
December, when the OPEC oil producers group failed to agree an
crude production ceiling amid a global supply glut, had been
overdone, he also said the outlook for next year is not rosy.
Canada's finance minister said the weaker loonie will
probably face further pressure from persistently low commodity
prices that also complicate the fiscal situation.
Data from China's National Bureau of Statistics suggested
the country's economic slowdown is stabilizing after the
government's additional monetary and fiscal stimulus this year.
China is a major customer of Canada's natural resource exports.
Canada's household debt-to-income ratio rose to a record in
the third quarter, while the Teranet-National Bank Composite
House Price Index rose 6.1 percent from a year earlier.
Canadian government bond prices were lower across the
maturity curve, with the two-year CA2YT=RR price down 6
Canadian cents to yield 0.509 percent while the benchmark
10-year CA10YT=RR fell 59 Canadian cents to yield 1.471
percent.
The Canada-U.S. two-year bond spread was 2.6 basis points
wider at minus 43.9 basis points, near its deepest negative
spread in more than eight years as Treasuries underperformed
ahead of a likely Federal Reserve rate hike this week.