CANADA FX DEBT-C$ strengthens to a 2-week high on oil rally, firm domestic data

* Canadian dollar at C$1.3678, or 73.11 U.S. cents
    * Bond prices slightly lower across the maturity curve

    TORONTO, Feb 18 (Reuters) - The Canadian dollar reached a
two-week high against its U.S. counterpart on Thursday as crude
oil prices rebounded still further, while domestic economic data
was more robust than expected.
    However, the currency's gains stalled in front of C$1.3640,
the near eight-week high touched earlier this month.
    Oil extended its rally after Iran welcomed plans by Russia
and Saudi Arabia to freeze output and an industry report showed
a surprise drop in U.S. inventories. 
    U.S. crude prices were up 3.36 percent at $31.69 a
    Expectations for further easing by the Bank of Canada have
diminished as crude oil prices have rallied. The implied
probability of a rate cut by year-end has dropped to 65 percent,
while as recently as Feb. 12, a 25 basis point cut had been
fully implied.
    Canadian wholesale trade rose 2.0 percent in December from
November, more than expected, on record sales in the motor
vehicle and parts sector, data from Statistics Canada
    At 9:17 a.m. EST (1417 GMT), the Canadian dollar 
was trading at C$1.3678 to the greenback, or 73.11 U.S. cents,
stronger than the Bank of Canada's official close of C$1.3705,
or 72.97 U.S. cents, on Wednesday.
    The currency touched its strongest since Feb. 4 at C$1.3654,
while its weakest level was C$1.3710.
    Canadian government bond prices were slightly lower across
the maturity curve, with the two-year down 1.5
Canadian cents to yield 0.489 percent and the benchmark 10-year
 falling 12 Canadian cents to yield 1.192 percent.
    The 10-year yield has rebounded more than 27 basis points
from last week's record low of 0.921 percent as the flight to
safety unwinds. 
    Top-tier domestic data is awaited on Friday, featuring
December retail sales and the January consumer price index.

 (Reporting by Fergal Smith; Editing by Lisa Von Ahn)