* Canadian dollar at C$1.2874, or 77.68 U.S. cents
* Loonie touches its weakest since Dec. 19 at C$1.2897
* Bond prices lower across the yield curve
* 10-year yield touches lowest intraday since Jan. 17
By Fergal Smith
TORONTO, March 2 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Friday, adding to 10-week lows as data showed slower-than-expected growth in the domestic economy and investors braced for planned U.S. tariffs on steel and aluminum.
At 10:07 a.m. EST (1507 GMT), the Canadian dollar CAD=D4 was trading 0.3 percent lower at C$1.2874 to the greenback, or77.68 U.S. cents.
The currency's strongest level of the session was C$1.2822, while it touched its weakest since Dec. 19 at C$1.2897.
Canada's gross domestic product grew by an annualized 1.7percent in the final quarter of 2017, short of economists' forecasts for 2.0 percent, data from Statistics Canada showed. is just consistent with an economy that is seeing growth converge back to its trend pace," said Andrew Kelvin, senior rates strategist at TD Securities.
It points to a "more gradual pace of Bank of Canadatightening than is perhaps priced by the market," Kelvin added.
Money markets expect another interest rate hike from theBank of Canada by July. The central bank raised its benchmarkinterest rate in January to 1.25 percent, its third hike in sixmonths. BOCWATCH
Trump unveiled the tariffs on Thursday but did not makeclear whether they would apply to Canada and Mexico, whichtogether with the United States are trying to renegotiate the24-year-old North American Free Trade Agreement. sends 75 percent of its goods exports to the UnitedStates and would be vulnerable if a trade war erupted. Canada isalso the largest supplier of both steel and aluminum to theUnited States.
The price of oil, one of Canada's largest exports, was setto post its first weekly fall in three weeks on Friday as equitymarkets fell and as U.S. crude inventories climbed. crude CLc1 prices were down 0.8 percent at $60.52 abarrel.
Canadian government bond prices edged lower across the yieldcurve in sympathy with U.S. Treasuries. The 10-year CA10YT=RR dipped 1 Canadian cent to yield 2.178 percent.
Intraday, the 10-year yield touched its lowest since Jan. 17at 2.155 percent. The gap between the 10-year yield and its U.S.equivalent widened by 3.1 basis points to -65.7 basis points,its widest since June 26.