* Canadian dollar at C$1.3398, or 74.64 U.S. cents
* Loonie touches its weakest since March 9 at C$1.3420.
* Bond prices mixed across the yield curve
* 10-year yield touches a 10-day high at 1.261 percent
TORONTO, Oct 28 (Reuters) - The Canadian dollar weakened to set a seven-month low against its U.S. counterpart on Friday as stronger-than-expected U.S. growth supported the greenback and oil fell.
Oil prices were set for their biggest weekly losses in six weeks over doubts about whether producers can agree on cutting output enough to curb a global glut that has weighed on markets for two years. U.S. crude CLc1 was down 1.23 percent at $49.11 a barrel. O/R
The U.S. economy grew at its fastest pace in two years in the third quarter as a surge in exports and a rebound in inventory investment offset a slowdown in consumer spending. U.S. business spending on equipment dropped for the fourth straight quarter. Weak U.S. business investment has hampered a long-awaited pickup in growth of Canada's non-energy exports. (nL1N1AR0RY)
The loonie has been weakening since the Bank of Canada acknowledged last week that it had considered cutting interest rates at its policy meeting.
At 9:17 a.m. EDT (1317 GMT), the Canadian dollar CAD=D4 was trading at C$1.3398 to the greenback, or 74.64 U.S. cents, slightly weaker than Thursday's close of C$1.3387, or 74.70 U.S. cents.
The currency's strongest level of the session was C$1.3374, while it touched its weakest since March 9 at C$1.3420.
Canada will continue to act to ensure that lenders are prudent and consumer debt is sustainable, Finance Minister Bill Morneau said. His remarks come ahead of next week's fiscal and economic update from the government. government bond prices were mixed across the yield curve, with the two-year CA2YT=RR up 1 Canadian cent to yield 0.578 percent and the benchmark 10-year CA10YT=RR falling 1 Canadian cent to yield 1.239 percent.
The 10-year yield touched its highest intraday level since Oct. 18 at 1.261 percent.