CANADA FX DEBT-C$ strengthens on higher oil prices, domestic data

(Adds analyst quotes and updates prices)
    * Canadian dollar ends at C$1.3367, or 74.81 U.S. cents
    * Loonie touches weakest level since Oct. 1 at C$1.3434
    * Bond prices lower across the yield curve

    By Fergal Smith
    TORONTO, Dec 20 (Reuters) - The Canadian dollar strengthened
against its U.S. counterpart on Tuesday, recovering from a near
three-week low earlier, as higher oil prices and
stronger-than-expected domestic data offset broader gains for
the greenback.
    The value of Canadian wholesale trade rose 1.1 percent in
October, the biggest gain in five months. In volume terms, sales
were up 0.9 percent, which could bode well for broader economic
growth at the start of the fourth quarter. 
    The Canadian dollar got a lift from "positive data on
wholesale sales and an uptick in oil prices," said Adam Button,
currency analyst at ForexLive.
    U.S. crude prices settled up 11 cents at $52.23 a
barrel on forecasts of a steep draw in U.S. crude oil stocks.
Some gains were pared after Libya announced the reopening of
pipelines after a two-year blockade ended recently. 
    Oil is one of Canada's major exports.
    The Canadian dollar ended at C$1.3367 to the
greenback, or 74.81 U.S. cents, stronger than Monday's close of
C$1.3417, or 74.53 U.S. cents.
    The currency's strongest level of the session was C$1.3360,
while it touched its weakest intraday level since Oct. 1 at
C$1.3434, pressured by the recent drop in Canadian yields below
U.S. Treasuries.
    "This retracement in the Canadian dollar has been small
compared to the hefty decline over the past week," said Button,
who expects the loonie to weaken to C$1.4000 in the first half
of 2017 as the greenback climbs against a basket of major
    "It has been a non-stop U.S. dollar rally" since the U.S.
Federal Reserve's decision to raise interest rates, Button
    The U.S. dollar climbed to a 14-year high as Fed
Chair Janet Yellen's comments on jobs reinforced the notion of
faster U.S. interest rate hikes next year than had been
    Canadian government bond prices were lower across the yield
curve, with the two-year down 4.5 Canadian cents to
yield 0.826 percent and the benchmark 10-year 
falling 20 Canadian cents to yield 1.807 percent.
    The difference in yield between Canada's 2-year bond and its
U.S. equivalent narrowed by 3.3 basis points to a spread of
-39.4 basis points, as some recent underperformance for U.S.
Treasuries was pared. 
    Reports on Canadian inflation for November and retail sales
for October are due on Thursday, while gross domestic product
data for October is due on Friday.

 (Reporting by Fergal Smith; Editing by Paul Simao and Diane