CANADA FX DEBT-C$ extends gains as data beats, oil rises

    * Canadian dollar at C$1.2512, or 79.92 U.S. cents
    * Bond prices lower across the maturity curve
    * Spread between US, Canada 2-year bonds less than 10 bps

    TORONTO, July 24 (Reuters) - The Canadian dollar
strengthened against its U.S. counterpart on Monday, as domestic
wholesale trade data beat expectations, oil prices moved higher
and the greenback struggled to shrug off soft data and political
    The loonie         , as the currency is colloquially known,
is trading at its strongest in 14 months, helped by a hawkish
turn from the Bank of Canada and an interest rate hike earlier
this month.
    At 8:49 a.m. ET (1249 GMT), it was trading at C$1.2512 to
the greenback, or 79.92 U.S. cents, up 0.2 percent. The
currency's strongest level of the session was C$1.2511, its
strongest since May 3, 2016, while its weakest was C$1.2552.
    It has gained some 10 percent since early May, while the
spread between yields of Canadian and U.S. 2-year bonds has
narrowed sharply since June and now sits at less than 10 basis
points, its narrowest in more than a year.
    Analysts are eyeing C$1.25, or 80 U.S. cents, as a key
barrier for the loonie, and then the 2016 high of C$1.2461.
    Prices for oil, a major Canadian export, rallied after
leading OPEC producer Saudi Arabia pledged to cut its exports to
help speed up the rebalancing of global supply and demand.
    Canada wholesale trade rose more than expected in May,
driven by increased sales of motor vehicles and agricultural
supplies, data from Statistics Canada showed.             
    Canadian government bond prices were lower across the
maturity curve, with the two-year            price down 2
Canadian cents to yield 1.261 percent and the benchmark 10-year
            falling 13 Canadian cents to yield 1.900 percent.

 (Reporting by Alastair Sharp; Editing by Bernadette Baum)