CANADA FX DEBT-C$ strengthens to a 4-week high as oil rallies
* Canadian dollar at C$1.2944, or 77.26 U.S. cents * Loonie touches its strongest since July 15 at C$1.2926 * Bond prices higher across flatter maturity curve TORONTO, Aug 12 (Reuters) - The Canadian dollar strengthened to a four-week high against its U.S. counterpart on Friday as oil rallied and weaker-than-expected U.S. data weighed on the greenback. The U.S. dollar fell 0.4 percent against a basket of major currencies after U.S. data showed that retail sales were unexpectedly flat in July. Oil prices rose, supported by the prospect of talks by exporters about ways to prop up a market grappling with a supply overhang. U.S. crude prices were up 0.8 percent to $43.75 a barrel. Adding to support for Canada's risk-sensitive currency, world stocks were headed for their fourth week of gains in five after Wall Street's three main indexes rose to coordinated record highs on Thursday for the first time since 1999. At 9:28 a.m. EDT (1328 GMT), the Canadian dollar traded at C$1.2944 to the greenback, or 77.26 U.S. cents, stronger than Thursday's close of C$1.2980, or 77.04 U.S. cents. The currency's weakest level of the session was C$1.2993, while it touched its strongest since July 15 at C$1.2926. Canada's Teranet-National Bank Composite House Price Index showed national home prices rose 2.0 percent last month from June. Prices were up 10.9 percent from a year earlier. Canadian government bond prices were higher across the maturity curve in sympathy with U.S. Treasuries as expectations dipped for a Federal Reserve rate hike this year. The two-year price rose 4.5 Canadian cents to yield 0.515 percent and the benchmark 10-year climbed 37 Canadian cents to yield 0.992 percent. The curve flattened as the spread between the 2-year and 10-year yields narrowed by 1.6 basis points to 47.7, its narrowest gap since June 2008, indicating outperformance for longer-dated maturities. (Reporting by Fergal Smith; Editing by Jeffrey Benkoe)
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