CANADA FX DEBT-C$ advances to 2-week high as oil prices climb

    * Canadian dollar rises 0.4 percent against the greenback
    * Loonie touches its strongest since Dec. 21 at 1.3528
    * Price of U.S. oil rises 1.8 percent
    * Canadian bond prices fall across a steeper yield curve

    TORONTO, Jan 3 (Reuters) - The Canadian dollar strengthened
to a nearly two-week high against its U.S. counterpart on
Thursday as oil prices rose and the greenback broadly declined.
    Gains for the loonie came ahead of the release on Friday of
Canada's employment report for December, which could help guide
expectations for next week's interest rate decision from the
Bank of Canada.
    At 9:08 a.m. (1408 GMT), the Canadian dollar          was
trading 0.4 percent higher at 1.3530 to the greenback, or 73.91
U.S. cents. The currency, which fell 7.8 percent in 2018,
touched its strongest since Dec. 21 at 1.3528.
    The price of oil, one of Canada's major exports, rose
despite volatile currency and stock markets, as well as concerns
that an economic slowdown in 2019 will curb fuel demand. U.S.
crude        prices were up 1.8 percent at $47.38 a barrel.
    Stocks tumbled after Apple Inc          stunned investors
with a rare sales warning that inflamed fears that the Sino-U.S.
trade war and a slowing China economy would erode corporate
profits more than expected.             
    The U.S. dollar        declined against a basket of major
currencies as the yen surged. Investors were attracted to the 
perceived safety of the Japanese currency.             
    Canadian government bond prices were lower across a steeper
yield curve, with the two-year            down 2 Canadian cents
to yield 1.853 percent and the 10-year             falling 12
Canadian cents to yield 1.916 percent.
    The gap between Canada's 10-year yield and its U.S.
equivalent narrowed by 3.6 basis points to a spread of 72.4
basis points in favor of the U.S. bond, its narrowest since Nov.

 (Reporting by Fergal Smith; Editing by Bernadette Baum)