CANADA FX DEBT-C$ notches 2-week high as trade talks optimism boosts stocks

    * Canadian dollar rises 0.4 percent against the greenback
    * Canada adds 9,300 jobs in December
    * Price of U.S. oil climbs 3.4 percent
    * Canadian bond prices fall across the yield curve

    By Fergal Smith
    TORONTO, Jan 4 (Reuters) - The Canadian dollar strengthened
to a two-week high against the greenback on Friday amid investor
optimism on trade talks, while bets for no further Bank of
Canada interest rate hikes stayed in place after domestic data
showing a slower pace of job creation.
    At 9:44 a.m. (1444 GMT), the Canadian dollar          was
trading 0.4 percent higher at 1.3437 to the greenback, or 74.42
U.S. cents. The currency touched its strongest level since Dec.
19 at 1.3423.
    Canada added 9,300 jobs in December on an increase in
part-time hiring, slightly more than markets had expected after
a record 94,100 jobs were created in the previous month,
Statistics Canada data indicated.             
    "Decent, not great though ... we were due for a pullback in
hiring after the very strong November data," said Andrew Kelvin,
senior rates strategist at TD Securities.
    Money markets expect the Bank of Canada, which has hiked
five times since July 2017, to leave its benchmark interest rate
on hold at 1.75 percent next week and through the rest of the
year. In November, before a sell-off in stocks and oil prices
deepened, the market had expected rates to rise to about 2.50
percent by the end of 2019.               
    Stocks and the price of oil, one of Canada's major exports,
climbed on Friday after China said it would hold trade talks
with the United States and a survey showed China's services
sector expanded in December. U.S. crude oil futures        were
up 3.40 percent at $48.69 a barrel.             
    The U.S. dollar        rose against a basket of major
currencies after data showed U.S. job growth surged in December,
which could help to allay a recent surge in fears about the
economy's health that has roiled financial markets.             
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries. The two-year           
fell 9.5 Canadian cents to yield 1.816 percent and the 10-year
            declined 61 Canadian cents to yield 1.895 percent.
    On Thursday, the 10-year yield touched its lowest intraday
level in more than 16 months at 1.814 percent.
    Separate data from Statistic Canada showed that Canadian
producer prices fell by 0.8 percent in November from October,
the largest drop in almost two years, thanks largely to cheaper
energy and petroleum products.                            

 (Reporting by Fergal Smith
Editing by Nick Zieminski)