CANADA FX DEBT-C$ strengthens as oil rises, greenback slides

* Canadian dollar at C$1.3287, or 75.26 U.S. cents
    * Loonie touches its strongest since Dec. 14 at C$1.3255.
    * Bond prices higher across the yield curve

    TORONTO, Jan 5 (Reuters) - The Canadian dollar strengthened
to a three-week high against its U.S. counterpart on Thursday as
oil prices rose and the greenback lost ground against a basket
of major currencies.
    Some of the biggest gains on record for China's yuan sent
currency markets spinning, driving the U.S. dollar broadly lower
and threatening to quash one of the central bets of global
investors for 2017. 
    Prices of oil, one of Canada's major exports, rose after
Saudi Arabia started talks with customers about a reduction in
crude sales to support a plan by OPEC to reduce global supply.
    U.S. crude prices were up 0.71 percent at $53.64 a
    At 9:15 a.m. ET (1415 GMT), the Canadian dollar was
trading at C$1.3287 to the greenback, or 75.26 U.S. cents,
stronger than Wednesday's close of C$1.3308, or 75.14 U.S.
    The currency's weakest level of the session was C$1.3312,
while it touched its strongest since Dec. 14 at C$1.3255.
    The move follows a 3 percent gain for the currency in 2016,
its first annual advance since 2012, as oil rebounded from its
February trough. 
    Canadian producer prices rose 0.3 percent in November from
October on higher prices for motorized and recreational vehicles
and primary non-ferrous metal products, Statistics Canada said.
    Canadian government bond prices were higher across the yield
curve, with the two-year price up 1.5 Canadian cents
to yield 0.748 percent and the 10-year rising 5
Canadian cents to yield 1.705 percent.
    The gap between Canada's 5-year yield and its U.S.
equivalent narrowed by 3.3 basis points to -79.6 basis points,
as U.S. Treasuries outperformed after data showed the U.S.
economy created fewer private-sector jobs in December than
market expectations.
    Canada's trade report for November and employment report for
December are due on Friday. 

 (Reporting by Fergal Smith; Editing by Meredith Mazzilli)