CANADA FX DEBT-Loonie notches 5-week high as investors welcome China-U.S. trade deal

    * Canadian dollar rises 0.1% against the greenback
    * Price of U.S. oil increases by 1.3%
    * Canadian household debt-to-income widens to 174.0%
    * Canada's 10-year yield touches a six-month high at 1.695%

    TORONTO, Dec 13 (Reuters) - The Canadian dollar strengthened
to a five-week high against its U.S. counterpart on Friday,
adding to this week's rally as investors welcomed a trade deal
between the United States and China.    
    U.S. stocks were modestly higher after China said first
phase trade talks with the United States have achieved major
progress and that Beijing would cancel tariffs scheduled to take
effect on Sunday.             
    U.S. crude oil futures        were up 1.3% at $59.94 a
barrel as hopes of progress in resolving the U.S.-China trade
dispute and Britain's general election result appeared to lift
two clouds that have been hanging over investor risk appetite.
    At 10:23 a.m. (1523 GMT), the Canadian dollar          was
trading 0.1% higher at 1.3171 to the greenback, or 75.92 U.S.
cents. The currency touched its strongest intraday level since
Nov. 6 at 1.3151.
    For the week, the loonie was on track to rise 0.6%.
    The ratio of Canadian household debt-to-income widened to
174.0% in the third quarter from a downwardly revised 173.4% in
the second quarter, Statistics Canada said.             
    The Bank of Canada has worried that an interest rate cut
could add to near record levels of household indebtedness.
    On Thursday, Bank of Canada Governor Stephen Poloz said a
recent weakening in Canada's labor market, underscored by major
job losses in November, is unlikely to weigh heavily on future
monetary policy decisions.                 
    Canadian government bond prices were higher across the yield
curve in sympathy with U.S. Treasuries. The two-year           
rose 1.5 Canadian cents to yield 1.693% and the 10-year
            was up 12 Canadian cents to yield 1.657%.
    The 10-year yield touched its highest intraday level since
May 23 at 1.695%.

 (Reporting by Fergal Smith; Editing by Steve Orlofsky)