* C$ down at 93.98 U.S. cents

* Bond prices slightly higher along with U.S. Treasuries

The Canadian dollar fell on Monday morning as the price of oil, a key export that often influences the unit's price movements, dropped for a ninth straight session on concerns over weak fuel demand.

The unit touched an overnight session low of C$1.0661 to the U.S. dollar, or 93.80 U.S. cents as oil dropped below $70 a barrel.

With oil dipping below $70 a barrel that dampened interest in the oil-producing currencies, said Matthew Strauss, senior currency strategist RBC Capital Markets

The move lower came even as global equity markets showed signs of strength after Abu Dhabi bailed out debt-stricken fellow emirate Dubai. [MKTS/GLOB] Also, U.S. stock index futures signaled a higher open.

It turned risk aversion into slight risk appetite but it isn't as if it's a very significant return of risk appetite. It was more of a blip of risk appetite. We still need to see if that will carry through into the North American session, said Strauss.

The dollar index slipped, retreating from its highest in more than a month hit last week, after Abu Dhabi agreed to bail out its debt-laden neighbor with $10 billion in aid, easing worries about a possible debt default by Dubai.

David Bradley, director of foreign exchange trading at Scotia Capital, added the Canadian currency weakness was also likely due to a general lack of interest as we head into the holiday season.

At 7:42 a.m. (1242 GMT), the Canadian dollar CAD=D3 was at C$1.0640 to the U.S. dollar, or 93.98 U.S. cents, down from Friday's finish of C$1.0599 to the U.S. dollar, or 94.35 U.S.

Canadian bond prices were flat to higher across the curve, tracking U.S. Treasuries upward on Monday on bargain hunting after yields spiked last week.

Dubai U.S.