CANADA FX DEBT-C$ strengthens on solid domestic data, higher oil prices

* Canadian dollar at C$1.2671, or 78.92 U.S. cents
    * Bond prices lower across the maturity curve

 (New throughout, updates prices and market activity, adds
comments and details)
    By Fergal Smith
    TORONTO, April 22 (Reuters) - The Canadian dollar
strengthened against its U.S. counterpart on Friday as
stronger-than-expected domestic data and a rebound in oil prices
helped the loonie rack up its fourth week of gains in a row.
    Canadian retail sales unexpectedly climbed in February,
while core inflation was more robust than expected in March.
    "It certainly does underscore the surprising resilience we
have seen in the Canadian economy over the last few months of
data," said Andrew Kelvin, senior rates strategist at TD
    Oil prices rose as market sentiment turned more upbeat on
signs the persistent supply glut may be easing. U.S. crude
 prices settled at $43.73 a barrel, up 1.27 percent. 
    The currency has rallied 16 percent since falling to a
12-year low in January, helped by rebounding oil prices and a
shift in expectations for the direction of Bank of Canada
interest rates.
    The implied probability of a Bank of Canada rate hike this
year rose to 14 percent from near zero before the data,
overnight index swaps (OIS) showed. At the start of March, the
OIS market had implied a more than 50 percent chance of a cut.
    While analysts said the loonie could have more room to run,
they warned there were a number of risk factors that could
derail it, including weaker-than-expected economic data or a
change in rate expectations for either the Bank of Canada or the
U.S. Federal Reserve.
    "If you are long Canadian dollar ... you want to keep a
fairly tight leash on it," said Amo Sahota, director at Klarity
FX in San Francisco.
    The Canadian dollar ended the North American
trading session at C$1.2671 to the greenback, or 78.92 U.S.
cents, stronger than Thursday's official close of C$1.2727, or
78.57 U.S. cents.
    The loonie gained 1.2 percent for the week. Since late
January, the currency has seen only one down week.
    Speculators increased bullish bets on the loonie, Commodity
Futures Trading Commission data showed. Net long Canadian dollar
positions rose to 7,308 contracts in the week ended April 19
from 2,385 contracts in the prior week. 
    Canadian government bond prices were lower across the
maturity curve, underperforming U.S. Treasuries.
    The two-year price fell 8.5 Canadian cents to
yield 0.678 percent and the new benchmark 10-year 
was down 36 Canadian cents to yield 1.495 percent.
    The 10-year yield touched its highest since Dec. 16 at 1.498

 (Additional reporting by Leah Schnurr in Ottawa; Editing by
David Gregorio)