* Canadian dollar rises 0.4 percent against the greenback * Price of U.S. oil rises nearly 2 percent * Canada manufacturing PMI falls to nearly 2-year low * Canadian bond prices rise across a flatter yield curve * Canada's 10-year yield hits its lowest in more than one year TORONTO, Jan 2 (Reuters) - The Canadian dollar strengthened against its broadly stronger U.S. counterpart on Wednesday, paring some of its 2018 decline as higher oil prices offset domestic data showing a slowdown in manufacturing growth. The IHS Markit Canada Manufacturing Purchasing Managers' index fell to a seasonally adjusted 53.6 in December, its lowest in nearly two years, from 54.9 in November, as production growth faltered and export orders stagnated. Signs of slower Canadian manufacturing growth came as weak data in Asia and Europe added to fears of a global economic slowdown. Still, stocks pared some earlier losses and the price of oil, one of Canada's major exports, turned higher. U.S. crude oil futures were up nearly 2 percent at $46.31 a barrel. At 10:14 a.m. (1514 GMT), the Canadian dollar was trading 0.4 percent higher at 1.3597 to the greenback, or 73.55 U.S. cents. The currency, which touched on Friday its weakest since May 2017 at 1.3665, traded in a range of 1.3570 to 1.3662. In 2018, the loonie declined 7.8 percent, its worst performance in three years as oil prices plunged and expectations dwindled for additional rate hikes in 2019 from the Bank of Canada. Canadian government bond prices were higher across a flatter yield curve, with the two-year up 3 Canadian cents to yield 1.845 percent and the 10-year rising 38 Canadian cents to yield 1.921 percent. The 10-year yield hit its lowest intraday since December 2017 at 1.871 percent. The country's employment report for December is due on Friday. (Reporting by Fergal Smith Editing by Nick Zieminski)
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