Canadian dollar, bonds rise on weak data

* C$ rises 0.2 percent, reverses early losses

* Bonds up on weak data from U.S., Japan

TORONTO, Nov 17 - The Canadian dollar ended higher against the U.S. currency on Monday, rebounding from morning lows as the greenback retreated broadly following weak U.S. manufacturing data.

Canadian bond prices rose alongside U.S. treasuries as the weak U.S. manufacturing data and gloomy economic news from Japan fueled fears of a global recession, driving safe-haven buying of government debt.

The currency ended the session at C$1.2232 to the U.S. dollar, or 81.75 U.S. cents, up from C$1.2255 to the U.S. dollar, or 81.60 U.S. cents, at Friday's close.

The Canadian dollar moved in a wide range of 80.87 U.S. cents to 82.49 U.S. cents, ending higher despite crude oil prices that fell below $55 a barrel, down more than 3 percent .

"There's just no follow-through one way or the other. It's still very much flow driven," said Shaun Osborne, chief currency strategist at TD Securities.

"I think it's just a reflection of the general U.S. dollar trend here."

The greenback weakened as a report showed the New York Federal Reserve's gauge of manufacturing in the region fell to a record low in November.

Osborne said market players are watching the Canadian currency's daily ranges, rather than its short-term moves, and attributed the wide swings on Monday to generally illiquid markets.

The currency typically moves roughly in line with oil, gas and metal prices, due to Canada's vast resources.

But the financial crisis has prompted investors to embrace the U.S. dollar's liquidity and general safe-haven status, putting resource-driven currencies on the defensive.

Until there are clear signs of credit conditions improving and financial flows returning to normal, the Canadian dollar will continue to be under pressure, analysts said.

"On balance it still feels like the risk is we can drift weaker," said Shane Enright, currency strategist at CIBC World Markets.

BONDS TRACK TREASURIES HIGHER

Canadian bond prices rallied alongside the larger U.S. debt market on the gloomy manufacturing news, as well as data showing Japan's economy shrank 0.1 percent in the third quarter, sending the world's second-biggest economy into its first recession in seven years.

The Canadian overnight Libor rate <LIBOR01> was 2.5000 percent, up from 2.4667 percent on Friday.

Friday's CORRA rate <CORRA=> was 2.2425 percent, down slightly from 2.2460 percent on Thursday. The Bank of Canada publishes the previous day's rate at around 9 a.m. daily.

The two-year bond gained 3 Canadian cents to C$101.71 to yield 1.891 percent. The 10-year bond climbed 58 Canadian cents to C$105.48 to yield 3.566 percent.

The yield spread between the two- and 10-year bond was 182 basis points, up from 173.1 at the previous close.

The 30-year bond added C$1.35 to C$114.15 to yield 4.149 percent. In the United States, the 30-year treasury yielded 4.189 percent.