(Adds strategist comment, updates prices to close)
* Canadian dollar settles at C$1.3433, or 74.44 U.S. cents
* Bond prices lower across the yield curve
By Alastair Sharp
TORONTO, Jan 3 (Reuters) - The Canadian dollar made a slight gain against a much stronger U.S. counterpart on Tuesday, holding in despite a sharp reversal in prices for crude oil, a major Canadian export.
But the loonie, as Canada's currency is colloquially known, could face a resumption of pre-holiday weakness later this week, according to Scotiabank currency strategist Eric Theoret.
Canada's trade report for November and employment numbers for December are due on Friday, following data released just before Christmas that showed cooling inflation and a contraction in economic growth. ECONCA
"The risk is to more disappointment and more of an adjustment in terms of the currency," Theoret said.
A weak trade number would likely force the Bank of Canada to tweak its outlook when it makes its next rate decision and issues a monetary policy report on Jan. 18, he said.
"To me, it's way overdue for them to acknowledge they have been wrong," said Theoret.
The Canadian dollar CAD=D4 settled at C$1.3433 to the greenback, or 74.44 U.S. cents, barely stronger than Monday's close of C$1.3438, or 74.42 U.S. cents, according to Reuters data.
The currency's strongest level of the session was C$1.3399, while its weakest was C$1.3461.
The Bank of Canada's official close on Friday, the last trading day of 2016, was C$1.3427, or 74.48 U.S. cents.
The loonie rose 3 percent in 2016, its first annual gain since 2012.
Oil, one of Canada's major exports, reached 18-month highs in morning trade before retreating as the greenback hit its highest level against a basket of currencies since late 2002 on the back of data showing solid growth in U.S. manufacturing and as upbeat Chinese data helped boost global stock markets. FRX/ slashed bearish bets on the Canadian dollar for the second straight week, according to Commodity Futures Trading Commission data and Reuters calculations. Net short Canadian dollar positions fell to 1,598 contracts as of Dec. 27 from 11,754 a week earlier. government bond prices were lower across the yield curve, with the two-year CA2YT=RR price down 3 Canadian cents to yield 0.763 percent and the benchmark 10-year CA10YT=RR falling 24 Canadian cents to yield 1.742 percent.
In mid-December, the 10-year yield touched its highest in 17 months at 1.859 percent.