* Canadian dollar rises 0.3 percent against greenback * Price of U.S. oil rises * Loonie touches its strongest since Dec. 4 at 1.3223 * Canadian housing starts fall to 213,419 units in December * Canadian bond prices slip across the yield curve TORONTO, Jan 9 (Reuters) - The Canadian dollar strengthened to a five-week high against the greenback on Wednesday as rising expectations of a trade deal between the United States and China boosted investor sentiment ahead of an interest rate decision by the Bank of Canada. Stocks and the price of oil, one of Canada's major exports, climbed after talks between the world's two largest economies raised hopes an all-out trade war could be averted. U.S. crude oil futures were up 2.9 percent at $51.24 a barrel. The Bank of Canada has been concerned that trade conflicts are weighing more heavily on the global economy and that a sharp slide in oil prices since October could hurt the outlook for Canada. Money markets expect the central bank, which hiked rates three times in 2018, to leave its benchmark interest rate unchanged on Wednesday at 1.75 percent. Its decision is due at 10:00 a.m.(1500 GMT). Still, the Canadian dollar is expected to rally in 2019, recovering some of last year's decline, as the Bank of Canada surprises speculators who are betting it has already finished raising interest rates, a Reuters poll showed. At 9:19 a.m., the Canadian dollar was trading 0.3 percent higher at 1.3238 to the greenback, or 75.54 U.S. cents. The currency touched its strongest intraday level since Dec. 4 at 1.3223. Gains for the loonie came as data showed stronger-than-expected Canadian housing starts in December. The seasonally adjusted annualized rate of housing starts fell to 213,419 units from an upwardly revised 224,349 units in November, the Canadian Mortgage and Housing Corporation (CMHC) said. Economists had expected starts to fall to 205,000 units. Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries. The two-year fell 3 Canadian cents to yield 1.917 percent and the 10-year declined 10 Canadian cents to yield 1.980 percent. The 10-year yield touched its highest intraday since Dec. 27 at 1.981 percent. (Reporting by Fergal Smith; Editing by Bernadette Baum)
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