CANADA FX DEBT-C$ gains on US$ helped by upbeat economic data

* C$ at C$1.0167 vs US$, or 98.39 U.S. cents
    * Rising expectations of a Bank of Canada rate hike underpin
    * Jitters over central bank policy roil global markets again

    By Solarina Ho
    TORONTO, June 13 (Reuters) - The Canadian dollar gained
against its U.S. counterpart on Thursday as a spate of
encouraging economic data helped stoke bets on a
sooner-than-expected interest rate hike in Canada.
    "People are starting to factor in rate increases in Canada
again, which has helped, but we're not really pushing any new
ground at the moment," said Shaun Osborne, chief currency
strategist at TD Securities.
    At 10:08 a.m. (1408 GMT) the Canadian dollar 
strengthened about 0.4 percent, trading at C$1.0167 to the
greenback, or 98.36 U.S. cents, compared with C$1.0212, or 97.92
U.S. cents, at Wednesday's North American close.$1.0225.
    But the Canadian dollar was expected by some to trade in a
narrow range.
     Osborne said the loonie, as Canada's currency is
colloquially known, would likely not strengthen beyond the
C$1.0150 level it reached earlier in the session and would also
find buying interest around C$1.0225.
     Earlier on Thursday, the Canadian government reported that
industrial capacity usage, particularly in mining, oil and gas
extraction, rebounded in the first quarter from a weak second
half of 2012, and housing prices rose more than expected.
    These reports mirrored a trend of improving Canadian
economic data, which included a blockbuster gain in employment
in May and stronger housing data.
    Overnight index swaps, which trade based on expectations for
the central bank's key policy rate, have risen recently as solid
economic data has led some investors to bet on a rate hike
sooner than previously expected. 
    A Reuters poll on May 23 showed most economists don't expect
the Bank of Canada to hike rates until the fourth quarter of
2014 due to tepid economic growth and low inflation.  
    The two-year bond was up 2 Canadian cents to
yield 1.160 percent, while the benchmark 10-year bond
 rose 20 Canadian cents to yield 2.189 percent.