* Bounces off session low of C$1.0662
* Commodity backdrop helps steer turnaround
(Adds closing dollar and bond prices)
TORONTO, Dec 14 (Reuters) - Canada's currency edged higher
on Monday, clawing back from an early drop to its lowest level
in three sessions, boosted by a rising gold price and some
stability in oil after recent declines.
The turnaround in the Canadian currency was also helped
along by a weaker U.S. dollar as Abu Dhabi's decision to throw
neighboring emirate Dubai a $10 billion lifeline to repay debts
slowed safe-haven buying of the greenback.
That all helped the domestic currency rally as high as
C$1.0568 to the U.S. dollar, or 94.63 U.S. cents.
Earlier it had fallen to C$1.0662 to the U.S. dollar, or
93.79 U.S. cents, which added to a sharp slide on Friday and
marked its lowest level since Dec. 9.
"It just felt to me like some of the move from Friday was
taken back," said Steve Butler, director of foreign exchange
trading at Scotia Capital. "We're now at a bit of a crossroads
on whether or not the U.S. dollar continues to strengthen."
The Canadian unit closed at C$1.0593 to the U.S. dollar, or
94.40 U.S. cents, up from C$1.0599 to the U.S. dollar, or 94.35
U.S. cents, at Friday's close.
Gold prices were up 0.7 percent, while oil prices steadied
after earlier falling to their lowest level since Oct. 5.
Both oil and gold are key Canadian exports whose prices
often influence the country's currency.
BONDS LOSE SAFE HAVEN BID
Canadian bond prices were slightly lower as investors
snapped up riskier assets like equities on hopes for more
acquisitions in the energy sector following Exxon Mobil Corp's
<XOM.N> deal to buy XTO Energy Inc <XTO.N>.
The two-year Canadian government bond <CA2YT=RR> fell 3
Canadian cents to C$99.985 to yield 1.26 percent. The 10-year
bond <CA10YT=RR> fell 17 Canadian cents to C$102.77 to yield
Canadian bonds put in mixed performance against Treasuries,
with the 10-year yield narrowing to 14.3 basis points below its
U.S. counterpart from 16.1 basis points the previous session.
(Reporting by Frank Pingue and Jeffrey Hodgson; editing by