CANADA FX DEBT-C$ hits nearly 2-week high amid OPEC optimism

* Canadian dollar at C$1.3394, or 74.66 U.S. cents
    * Loonie touches its strongest since Nov. 9 at C$1.3378
    * Bond prices higher across the yield curve

    TORONTO, Nov 22 (Reuters) - The Canadian dollar strengthened
to a nearly two-week high against its U.S. counterpart on
Tuesday as investors weighed prospects of an output cut by major
oil producers and domestic retail sales rose for the first time
in three months.
    Canadian retail sales rose 0.6 percent in September, in line
with economists' expectations, but would have been flat without
the increased purchases of cars and parts, data from Statistics
Canada showed. After removing the effects of price changes,
retail sales climbed 0.6 percent. 
    Oil prices reached their highest this month before turning
lower. A growing consensus has emerged in the market that OPEC
will overcome internal disputes and scepticism to strike a deal
that materially reduces crude output. 
    U.S. crude prices were down 0.17 percent at $48.16 a
barrel. Oil is one of Canada's major exports.
    At 9:23 a.m. EDT (1423 GMT), the Canadian dollar 
was trading at C$1.3394 to the greenback, or 74.66 U.S. cents,
stronger than Monday's close of C$1.3413, or 74.55 U.S. cents.
    The currency's weakest level of the session was C$1.3433,
while it touched its strongest since Nov. 9 at C$1.3378.
    An Asia-Pacific trade deal stands almost no chance of
working now that U.S. President-elect Donald Trump has vowed to
pull the plug on it, proponents of the pact said. The TPP, which
aims to cut trade barriers in some of Asia's fastest-growing
economies and stretch from Canada to Vietnam, cannot take effect
without the United States. 
    The TPP countries as a group would be Canada's largest
trading partner, with more than 70 percent of Canada's trade and
investment flowing through the region, according to Global
Affairs Canada.
    Canadian government bond prices were higher across a flatter
yield curve, with the two-year up 1 Canadian cent to
yield 0.669 percent and the benchmark 10-year rising
20 Canadian cents to yield 1.548 percent.
    The 2-year yield fell 0.5 of a basis point further below its
U.S. equivalent to leave the spread at -42.8 basis points, its
largest gap since January, as Treasuries underperformed at the
front of the curve.

 (Reporting by Fergal Smith; Editing by Meredith Mazzilli)