* Canadian dollar at C$1.2873, or 77.68 U.S. cents
* Bond prices higher across the maturity curve
TORONTO, April 15 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Friday as oil prices fell and
after a deeper-than-expected drop in Canadian manufacturing
shipments.
Oil prices slid despite reassuring Chinese data
as analysts said a weekend meeting of major oil
exporters would do little to help clear global oversupply. O/R
U.S. crude CLc1 prices were down 2.39 percent to $40.51 a
barrel.
Factory sales dropped more than expected in February from
January, falling 3.3 percent following three straight months of
gains, data from Statistics Canada showed.
At 9:03 a.m. EDT (1303 GMT), the Canadian dollar CAD=D4
was trading at C$1.2873 to the greenback, or 77.68 U.S. cents,
weaker than Thursday's close of C$1.2849, or 77.83 U.S. cents.
The currency's strongest level of the session was C$1.2798,
while its weakest was C$1.2896.
The loonie hit a nearly nine-month high at C$1.2744 on
Wednesday. However, the central bank warned the same day that
the country's improving economy faced downside risks, including
a stronger currency that could drag on non-commodity exports,
although it held interest rates steady and raised growth
forecasts.
Still, the implied probability of a Bank of Canada rate cut
this year has been reduced to near zero from more than 50
percent at the start of March. BOCWATCH
Canadian government bond prices were higher across a flatter
maturity curve, with the two-year CA2YT=RR price up 1.5
Canadian cents to yield 0.589 percent and the benchmark 10-year
CA10YT=RR rising 30 Canadian cents to yield 1.262 percent.
The Canada-U.S. 10-year spread was 2.4 basis points more
negative at -50.9 basis points as Canadian government bonds
outperformed. The spread touched -48.5 basis points on Monday
and on Thursday, its narrowest gap since May 2015.