CANADA FX DEBT-C$ gains ahead of BoC rate announcement

* C$ finishes at C$1.0293 to the U.S. dollar

* Focus on Tuesday's Bank of Canada rate announcement

* Bond prices flat to higher (Updates with closing figures, adds quote)

By Frank Pingue

TORONTO, Oct 19 (Reuters) - The Canadian dollar was higher against the greenback on Monday afternoon, rising on firm commodity prices and ahead of the Bank of Canada's interest rate announcement on Tuesday.

The rally was aided also by a weaker U.S. dollar as investors bet the Federal Reserve will hold U.S. interest rates near zero well into next year. [FRX/]

"It's really just recouping some of the lost ground from Friday and over the weekend," said Eric Lascelles, chief economics and rates strategist TD Securities.

"And the market has managed to wrap its head around the idea that the Bank of Canada is not hiking (rates) in the near term and as a consequence the selling pressure in Canada has abated now that markets are aware of that fact."

The Bank of Canada is expected to keep interest rates steady at record lows and only tinker with its economic forecasts on Tuesday as it waits for firmer evidence of economic recovery. [ID:nN16310648]

Canada's currency rose as high as C$1.0282 to the U.S. dollar, or 97.26 U.S. cents on Monday.

It closed at C$1.0293 to the U.S. dollar, or 97.15 U.S. cents, up from C$1.0382 to the U.S. dollar, or 96.32 U.S. cents, at Friday's close.

Helping the currency's rise were gold prices that held above $1,060 an ounce and oil prices that steadied above $79 a barrel. [GOL/] [O/R]

BONDS FLAT TO HIGHER

Canadian bond prices, with no major domestic economic data to influence trade, were flat to slightly higher as investors were reluctant to make any big bets ahead of the Bank of Canada interest rate statement on Tuesday morning.

"Yields are generally higher but they're off their worst levels for the bank's meeting tomorrow," said Mark Chandler, fixed income strategist at RBC Capital Markets.

"There's a little anticipation over what the Bank of Canada might say tomorrow."

Longer-dated bonds followed the big U.S. Treasuries market, said Chandler, where prices rose on a weaker reading of U.S. homebuilder sentiment. [US/]

The two-year bond was flat, up 1 Canadian cent at C$99.23 to yield 1.625 percent, while the 30-year bond climbed 25 Canadian cents to C$117.25 to yield 3.966 percent. (Additional reporting by Jennifer Kwan; editing by Peter Galloway)