CANADA FX DEBT-C$ at strongest level since January on domestic data

* Canadian dollar at $1.2228, or 81.78 U.S. cents
    * Bond prices mostly lower across the maturity curve
    * Loonie slips, but gains almost 3 pct on week

    TORONTO, April 17 (Reuters) - The Canadian dollar slipped on
Friday but still gained almost 3 percent against its U.S.
counterpart on the week as strong data and an upbeat Bank of
Canada message brought the loonie to a level that piqued the
interest of U.S. dollar bulls.
    The Canadian currency hit its strongest level since January
after a surprise jump in domestic inflation and strong retail
sales data, but the trade lost momentum as it strengthened.  
    "The strong retail sales and inflation data throw gasoline
on the Canadian dollar fire, but it burned out almost
immediately as the pair approached C$1.20," said Adam Button, a
currency analyst at ForexLive in Montreal.
    Betting against the Canadian dollar is still a crowded
trade, Button said, but the currency could push below C$1.20 in
coming weeks if upcoming data supports the more optimistic tone.
    The central bank on Tuesday talked down the likelihood of
another rate cut anytime soon and offered a more positive view
of economic growth for the second half of 2015. 
    The Canadian dollar ended the day trading at
C$1.2228 to the greenback, or 81.78 U.S. cents, weaker than the
Bank of Canada's official Thursday close of C$1.2181, or 82.10
U.S. cents.
    At the end of last week it was trading at C$1.2580.
    The rate of Canadian inflation rose 1.2 percent in March,
lifted by higher food prices as a decline in gasoline prices
moderated, data from Statistics Canada showed. 
    Meanwhile, retail sales snapped a two-month slide.
    Canadian government bond prices were mostly lower across the
maturity curve, with the two-year price down 9.5
Canadian cents to yield 0.632 percent and the benchmark 10-year
 falling 33 Canadian cents to yield 1.409 percent.
The 20-year and 30-year prices rose.

 (Reporting by Alastair Sharp; Editing by Bernadette Baum and
Chris Reese)