* C$ rises to 93.81 U.S. cents as oil climbs
* Currency ends week down 0.6 pct
* Bonds fall across the curve
TORONTO, Dec 18 (Reuters) - Canada's dollar ended higher
against the U.S. currency on Friday thanks to stronger oil
prices, recovering from the previous session when investors
took risk off the table.
Oil, a key Canadian export, finished the session higher,
boosting the appeal of the Canadian dollar. The price of oil
held higher above $73 a barrel after an incursion by Iranian
troops into an Iraqi oilfield sparked tensions, and on the
prospect of increased winter demand. [O/R][ID:nLDE5BH167]
"The fundamentals in Canada are strong. There's minimal
sovereign risk and the bias is still one that is
positive-Canada in terms of sentiment," said Camilla Sutton, a
currency strategist at Scotia Capital.
The Canadian dollar ended at C$1.0660 to the U.S. dollar,
or 93.81 U.S. cents, up from Thursday's finish at C$1.0703 to
the U.S. dollar, or 93.43 U.S. cents. The currency, which has
faced a resurgent greenback in recent days, ended the week down
Earlier in the session, the government said weaker tax
revenues and emergency spending measures to rescue the economy
from recession nudged Canada's budget deficit to C$3.30 billion
in October, compared with a C$592 million deficit in the same
month last year.
But Ottawa said it expects much of the deficit to disappear
when the economic recovery boosts tax intake and its
extraordinary spending measures end. [ID:nOTW002487]
Canadian wholesale trade figures for October, which came in
below expectations, had little impact on the currency.
Government debt fell alongside U.S. bonds as investors
pocketed profits after Thursday's safe-haven rally.
The two-year government bond <CA2YT=RR> fell 5 Canadian
cents to C$99.89 to yield 1.308 percent, while the 30-year bond
<CA30YT=RR> shed 72 Canadian cents to C$116.40 to yield 4.009
Canadian bonds outperformed U.S. notes, with the 10-year
yield spread widening to 14.1 basis points below its U.S.
counterpart from 11.6 basis points the previous session.
Next week, investors will likely deal with lower volumes
and year-end flows, which may make currency and bond markets
vulnerable to large swings.
The Canadian data calendar is light but the information is
substantial with October statistics due for retail sales and
monthly gross domestic product.
(Reporting by Ka Yan Ng; editing by Rob Wils