* Canadian dollar ends down at 95.22 U.S cents
* Bond prices fall as stocks finish higher
* Poll sees C$ at 94.61 U.S. cents in 12 months (Updates to close)
By Ka Yan Ng
TORONTO, Dec 2 (Reuters) - Canada's currency fell versus the U.S. dollar on Wednesday, tracking a downward swing in the the price of oil as investors cooled their heels ahead of major employment reports at the end of the week.
Crude, which is a key Canadian export, settled below $77 a barrel, more than 2 percent lower.
Employment data showing U.S. private employers shed 169,000 jobs in November was worse than forecast, though lower than October's numbers. But it raised investor worries that the broader U.S. employment report for November on Friday might be weak. [ID:nN02192113]
Canada is also due to report November employment data on
Friday, and the report is expected to show a gain of 15,000
jobs.
"The inability of the Canadian dollar to break below C$1.04 yesterday has taken the wind out of the some of the sails," said John Curran, senior vice-president at CanadianForex, a commercial foreign exchange dealing firm.
"People have been buying up the U.S. dollar a little because of lack of follow-through on the selloff ... and it makes sense to pare down some of the risk that you have if there's an inkling that these jobs numbers are going to be worse than expected."
The Canadian dollar closed at C$1.0502 to the U.S. dollar, or 95.22 U.S cents, down from C$1.0467 to the U.S. dollar, or 95.54 U.S cents, in the previous session.
On Tuesday, the currency climbed as high as C$1.0406 to the U.S. dollar, or 96.10 U.S. cents, its highest level since Oct. 21.
It failed to hold those gains and make a closing high at key level C$1.0419 on Tuesday, which would have represented an end to a recent trading range and would have set the currency on further gains, RBC Capital Markets said.
Canada's currency will drop slightly in value against the U.S. dollar in 12 months but may have a brief fling with parity in the interval, according to a Reuters poll of market strategists released on Wednesday. [ID:nN02450477]
Also on Wednesday, the federal government reiterated its forecast that its 2009-10 budget deficit will be a record high C$55.9 billion, but it said it would cut that in half in two years by winding down its economic stimulus plan. [ID:nN02536715]
The stimulus spending report did not significantly affect the currency, said Camilla Sutton, currency strategist at Scotia Capital.
BONDS FALL
Canadian bond prices were mostly lower as stock markets made a late-session march higher as gold prices picked up steam again after retreating from a record high.
New issues continued to be a factor to watch on Wednesday, with the province of Ontario offering C$825 million of debt in a two-part deal. This came on the heels of huge debt offerings earlier this week, which market players said would be a highlight of the bond market in the remaining weeks before the holidays. [CAN-ISU]
The two-year government bond