CANADA FX DEBT-Canadian dollar weakens as GDP undershoots expectations

* Canadian dollar weakens 0.4% against the greenback * Preliminary estimate shows GDP unchanged in September * Price of U.S. oil falls 1.3% * Canadian bond yields rise across the curve TORONTO, Oct 29 (Reuters) – The Canadian dollar weakened against its broadly stronger U.S. counterpart on Friday as oil prices fell and domestic data showed that economic growth likely flatlined in September. The loonie was trading 0.4% lower at 1.2389 to the greenback, or 80.72 U.S. cents. The currency traded in a range of 1.2329 to 1.2392 and was on track to dip 0.2% for the week. A preliminary estimate from Statistics Canada showed that GDP was unchanged in September following a weaker-than-expected gain of 0.4% in August. Economists had expected a gain of 0.7%. Third-quarter annualized GDP likely rose 1.9%, Statistics Canada said. That would be much less than the Bank of Canada forecast at a policy announcement on Wednesday. The central bank’s surprise warning about an early interest rate lift-off could douse a housing boom fueled by cheap debt. The price of oil, one of Canada’s major exports, fell as rising U.S. inventories and the prospect of more Iranian exports countered expectations that OPEC and its allies will keep supply tight. U.S. crude prices declined 1.3% to $81.77 a barrel, while the U.S. dollar gained ground against a basket of major currencies as the European Central Bank’s dovish tone at a policy meeting on Thursday weighed on the euro. Canadian government bond yields were higher across the curve, tracking the move in U.S. Treasuries. The 10-year was up 1.4 basis points at 1.687%, after touching on Thursday its highest intraday level since December 2019 at 1.729%. (Reporting by Fergal Smith; Editing by Andrea Ricci)