CANADA FX DEBT-C$ hits two-week low as domestic data points to economic slowdown

 (Adds strategist quotes and details on activity; updates
    * Loonie touches its weakest since Jan. 7 at 1.3355
    * Canadian factory sales fall 1.4 percent in November
    * Canadian wholesale trade falls 1.0 percent in November
    * Price of U.S. oil falls 2.3 percent
    * Canadian bond prices rise across yield curve

    By Fergal Smith
    TORONTO, Jan 22 (Reuters) - The Canadian dollar weakened to
a two-week low against its U.S. counterpart on Tuesday as
investors worried about the global growth outlook and
weaker-than-expected data added to evidence that Canada's
economy slowed at the end of 2018.
    Canadian factory sales decreased by 1.4 percent in November
from October on lower petroleum and coal product sales, while
November wholesale trade was down 1.0 percent, Statistics Canada
    The data supported the Bank of Canada's gloomy short-term
forecasts for the economy which have sidelined prospects of
further interest rate hikes over the coming months.
    The central bank has said that low oil prices, which have
led to production cuts in Alberta, and a weak housing market
would harm the economy in the fourth quarter of 2018 and the
first quarter of this year.             
    "I really think that Canadian data have peaked and I think
going forward the story is going to get worse and worse," said
Christian Lawrence, senior market strategist at Rabobank.
    Canada's retail sales report for November is due on
Wednesday which will help economists finalize forecasts for
monthly GDP.
    At 3:37 p.m. (2037 GMT), the Canadian dollar          was
trading 0.4 percent lower at 1.3352 to the greenback, or 74.90
U.S. cents. The currency touched its weakest intraday level
since Jan. 7 at 1.3355.
    The decline for the loonie came as stocks and the price of
oil, one of Canada's major exports, were pressured by fears of a
slowdown in the global economy. U.S. crude oil futures       
settled 2.3 percent lower at $52.57 a barrel.
    The Financial Times reported the Trump administration
rejected an offer from China for preparatory talks ahead of next
week's high-level trade negotiations.              
    "Any sign that global trade will slow is going to have a
more meaningful impact on Canada than the U.S.," Lawrence said.
    Canadian government bond prices were higher across the yield
curve in sympathy with U.S. Treasuries. The two-year           
rose 9 Canadian cents to yield 1.893 percent and the 10-year
            climbed 43 Canadian cents to yield 1.967 percent.
    On Friday, the 10-year yield touched its highest intraday in
one month at 2.049 percent.

 (Reporting by Fergal Smith
Editing by Tom Brown)