CANADA FX DEBT-C$ hits 1-week low as losses mount after BoC rate decision

    * Canadian dollar at C$1.2604, or 79.34 U.S. cents
    * Bond prices lower across the yield curve
    * 10-year yield near two-month high at 2.316 percent

    TORONTO, April 19 (Reuters) - The Canadian dollar weakened
to a more than one-week low against its U.S. counterpart on
Thursday, extending its decline after a Bank of Canada interest
rate decision the previous day, as oil prices fell and the
greenback climbed.
    At 4 p.m. EDT (2000 GMT), the Canadian dollar          was
trading 0.3 percent lower at C$1.2662 to the greenback, or 78.98
U.S. cents. The currency touched its weakest level since April
10 at C$1.2676.
    The loonie was due a pullback after it had appreciated too
much on higher oil prices and hopes of a deal to revamp the
North American Free Trade Agreement, said Fred Demers, chief
Canada macro strategist at TD Securities.
    The loonie had appreciated as much as 4.8 percent since
March. On Tuesday, it notched an eight-week high at C$1.2528.
    "The big story for me is the Bank of Canada will be lagging
the Fed in this tightening cycle," Demers said.
    The central bank left its benchmark interest rate on hold at
1.25 percent on Wednesday and said it did not know when or how
aggressive it would need to be to keep inflation in check.
    Chances of a hike at the next rate decision in May have
fallen to 30 percent from about 40 percent before the
announcement, the overnight index swaps market indicated.
    The U.S. dollar        gained against a basket of major
currencies on higher U.S. bond yields and expectations of more
rate increases from the Federal Reserve.                     
    The price of oil, one of Canada's major exports, hit highs
not seen since 2014, but later gave back gains following a swift
rally over the last week.                 
    U.S. crude oil futures        settled 0.3 percent lower at
$68.29 a barrel.        
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries, as investors worried
that recent strength in commodity prices would stoke higher
    The two-year            fell 3 Canadian cents to yield 1.908
percent and the 10-year             declined 27 Canadian cents
to yield 2.323 percent.
    The 2-year yield touched its highest since June 2011 at
1.926 percent.
    Canada added 42,800 jobs in March, led by hiring in the
construction industry, according to a report from ADP.
    Canadian inflation data for March and the February retail
sales report are due on Friday.

 (Reporting by Fergal Smith; Editing by Dan Grebler)