CANADA FX DEBT-C$ climbs to approach 3-month high in risk rally

* C$ hits strongest level since October 2012
    * Bond prices fall across the curve

    By Claire Sibonney
    TORONTO, Jan 11 (Reuters) - Canada's dollar climbed to a
near three-month high against its U.S. counterpart on Friday as
upbeat remarks from the European Central Bank and a massive
stimulus plan in Japan boosted optimism about the global
economy, despite some weak North American data.
    The Canadian dollar took its cue from rallying global
equities and growth-related currencies a day after the ECB said
that the euro zone economy will recover in 2013, while the
Japanese government approved a $117-billion spending plan.
    Hopes for steady global growth were reinforced by robust
trade and inflation data out of China. 
    "Generally, the wider backdrop is still relatively
constructive for risk," said David Tulk, chief Canada macro
strategist at TD Securities.
    "You're still riding the momentum of more of an optimistic
outlook for 2013 so I think that's what's probably keeping risk
sentiment somewhat bid ... it's small but it's definitely moved
that way since the start of the year."
    At 9:48 a.m. (1448 GMT), the Canadian dollar stood
around C$0.9819 versus the U.S. dollar, or $1.0184, firmer than
Thursday's North American session at C$0.9845 versus its U.S.
counterpart, or $1.0157.
    After breaking through near-term resistance around C$0.9820,
the currency hit an intraday high of C$0.9815, or $1.0188, its
loftiest since Oct. 18. 
    Data that showed Canada and the United States posted
wider-than-expected trade deficits had only a slight impact in
limiting the gains earlier Friday. 
    Also on the domestic front, investors received some mixed
signals about future monetary policy from a speech by the Bank
of Canada's Senior Deputy Governor Tiff Macklem late Thursday. 
    Macklem, considered the strongest candidate to be the next
governor of the central bank after Mark Carney leaves later this
year, said high household debt was stretching the Bank of
Canada's low interest rate strategy to the limit. But he also
said the Canadian economy will likely be more sluggish than
expected in the near term. 
    "It was an academic speech, so he has to give both sides of
the conversation ... When he was talking about the wider
economic backdrop, at least in terms of the near term outlook,
it was still a little bit more cautious and again this
(Canadian) trade report reinforces that," said Tulk.
    Canada's trade deficit unexpectedly jumped to C$1.96 billion
in November from C$552 million in October, marking the
fourth-largest trade deficit on record.
    Canadian bond prices retreated across the curve.
    The two-year bond was down 2 Canadian cents to
yield 1.204 percent, while the benchmark 10-year bond
 fell 12 Canadian cents to yield 1.968 percent.