CANADA FX DEBT-C$ climbs to 5-week high ahead of BoC rate decision

    * Canadian dollar rises 0.3 percent against greenback
    * Price of U.S. oil rises 
    * Loonie touches its strongest since Dec. 4 at 1.3223
    * Canadian housing starts fall to 213,419 units in December
    * Canadian bond prices slip across the yield curve

    TORONTO, Jan 9 (Reuters) - The Canadian dollar strengthened
to a five-week high against the greenback on Wednesday as rising
expectations of a trade deal between the United States and China
boosted investor sentiment ahead of an interest rate decision by
the Bank of Canada.
    Stocks and the price of oil, one of Canada's major exports,
climbed after talks between the world's two largest economies
raised hopes an all-out trade war could be averted. U.S. crude
oil futures        were up 2.9 percent at $51.24 a barrel.
    The Bank of Canada has been concerned that trade conflicts
are weighing more heavily on the global economy and that a sharp
slide in oil prices since October could hurt the outlook for
    Money markets expect the central bank, which hiked rates
three times in 2018, to leave its benchmark interest rate
unchanged on Wednesday at 1.75 percent. Its decision is due at
10:00 a.m.(1500 GMT).
    Still, the Canadian dollar is expected to rally in 2019,
recovering some of last year's decline, as the Bank of Canada
surprises speculators who are betting it has already finished
raising interest rates, a Reuters poll showed.             
    At 9:19 a.m., the Canadian dollar          was trading 0.3
percent higher at 1.3238 to the greenback, or 75.54 U.S. cents.
The currency touched its strongest intraday level since Dec. 4
at 1.3223.
    Gains for the loonie came as data showed
stronger-than-expected Canadian housing starts in December.
    The seasonally adjusted annualized rate of housing starts
fell to 213,419 units from an upwardly revised 224,349 units in
November, the Canadian Mortgage and Housing Corporation (CMHC)
said. Economists had expected starts to fall to 205,000 units.
    Canadian government bond prices were lower across the yield
curve in sympathy with U.S. Treasuries. The two-year           
fell 3 Canadian cents to yield 1.917 percent and the 10-year
            declined 10 Canadian cents to yield 1.980 percent.
    The 10-year yield touched its highest intraday since Dec. 27
at 1.981 percent.

 (Reporting by Fergal Smith; Editing by Bernadette Baum)