CANADA FX DEBT-C$ hits 10-week low on trade worries, GDP miss

* Canadian dollar at C$1.2874, or 77.68 U.S. cents

* Loonie touches its weakest since Dec. 19 at C$1.2897

* Bond prices lower across the yield curve

* 10-year yield touches lowest intraday since Jan. 17

TORONTO, March 2 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Friday, adding to 10-week lows as data showed slower-than-expected growth in the domestic economy and investors braced for planned U.S. tariffs on steel and aluminum. At 10:07 a.m. EST (1507 GMT), the Canadian dollar was trading 0.3 percent lower at C$1.2874 to the greenback, or 77.68 U.S. cents. The currency's strongest level of the session was C$1.2822, while it touched its weakest since Dec. 19 at C$1.2897. Canada's gross domestic product grew by an annualized 1.7 percent in the final quarter of 2017, short of economists' forecasts for 2.0 percent, data from Statistics Canada showed.

"It is just consistent with an economy that is seeing growth converge back to its trend pace," said Andrew Kelvin, senior rates strategist at TD Securities. It points to a "more gradual pace of Bank of Canada tightening than is perhaps priced by the market," Kelvin added. Money markets expect another interest rate hike from the Bank of Canada by July. The central bank raised its benchmark interest rate in January to 1.25 percent, its third hike in six months. Trump unveiled the tariffs on Thursday but did not make clear whether they would apply to Canada and Mexico, which together with the United States are trying to renegotiate the 24-year-old North American Free Trade Agreement. Canada sends 75 percent of its goods exports to the United States and would be vulnerable if a trade war erupted. Canada is also the largest supplier of both steel and aluminum to the United States. The price of oil, one of Canada's largest exports, was set to post its first weekly fall in three weeks on Friday as equity markets fell and as U.S. crude inventories climbed.

U.S. crude prices were down 0.8 percent at $60.52 a

barrel. Canadian government bond prices edged lower across the yield curve in sympathy with U.S. Treasuries. The 10-year dipped 1 Canadian cent to yield 2.178 percent. Intraday, the 10-year yield touched its lowest since Jan. 17 at 2.155 percent. The gap between the 10-year yield and its U.S. equivalent widened by 3.1 basis points to -65.7 basis points, its widest since June 26.

(Reporting by Fergal Smith Editing by Nick Zieminski)