CANADA FX DEBT-Loonie gains ground on greenback after U.S. GDP data

    * Canadian dollar rises 0.2% against the greenback
    * Price of U.S. oil falls 1.7%
    * Canadian bond prices gain across the yield curve
    * Canada-U.S. 2-year spread hits narrowest in more than two

    TORONTO, April 26 (Reuters) - The Canadian dollar
strengthened against its U.S. counterpart on Friday, following
data that showed factors driving faster growth in the U.S.
economy that are likely to be temporary.
    U.S. economic growth accelerated in the first quarter, but
the burst in growth was driven by trade and the largest
accumulation of unsold goods since 2015, factors that are likely
to reverse in the coming quarters.             
    The U.S. dollar         fell to a session low against a
basket of currencies after release of the data, while the price
of oil, one of Canada's major exports, retreated from its
strongest bull run in at least a year amid efforts to resume
Russian oil flows that were interrupted by contamination.
    U.S. crude        prices were down 1.7% at $64.11 a barrel.
    At 9:13 a.m. (1313 GMT), the Canadian dollar          was
trading 0.2% higher at 1.3462 to the greenback, or 74.28 U.S.
cents. The currency, which on Wednesday touched a nearly
four-month low at 1.3522, traded in a range of 1.3460 to 1.3498.
    Gains for the loonie came after Bank of Canada Governor
Stephen Poloz said on Thursday that the central bank could start
raising rates again "sometime down the road," although such a
move will depend on whether upcoming economic data backs up its
assessment that a current slowdown is only temporary.
    On Wednesday, the Bank of Canada held rates steady but took
a more dovish stance than in recent releases, removing wording
around the need for "future hikes," while lowering its growth
forecasts for 2019.             
    For the week, the loonie was on track to decline 0.5%.
    Canadian government bond prices were higher across the yield
curve in sympathy with U.S. Treasuries. The two-year           
rose 2.5 Canadian cents to yield 1.537% and the 10-year
            climbed 17 Canadian cents to yield 1.687%.
    The gap between Canada's 2-year yield and its U.S.
equivalent narrowed by 3.8 basis points to a spread of 74.2
basis points in favor of the U.S. bond, the narrowest since
April 9.

 (Reporting by Fergal Smith; Editing by Steve Orlofsky)