CANADA FX DEBT-C$ rallies on higher oil prices, retail sales data

    * AmerLoonie rises 0.3 percent against the U.S. dollar
    * Canadian retail sales fall 0.1 percent in December
    * Price of U.S. oil advances 1.2 percent
    * Canadian bond prices rise across a flatter yield curve

    By Fergal Smith
    TORONTO, Feb 22 (Reuters) - The Canadian dollar strengthened
against its U.S. counterpart on Friday, rebounding from an
earlier three-day low as stocks and oil prices rose and domestic
data showed a drop in retail sales that was less than the market
    Retail sales fell by 0.1 percent in December from November
to C$50.35 billion, due to lower gasoline prices, Statistics
Canada said.  Analysts had forecast a 0.3 percent decrease.
    In volume terms, retail sales increased 0.2 percent.
    "The slight increase in volumes will see monthly GDP
tracking forecasts around the 0.0 percent mark for December,
which isn't great, but is better than what we had been fearing
heading into the week," Royce Mendes, a senior economist at CIBC
Capital Markets, said in a research note.
    U.S. stocks and the price of oil, one of Canada's major
exports, were boosted by signs of progress in the ongoing trade
talks between the United States and China.             
    U.S. crude        prices were up 1.2 percent at $57.65 a
    At 9:12 a.m. (1412 GMT), the Canadian dollar          was
trading 0.3 percent higher at 1.3191 to the greenback, or 75.81
U.S. cents.
    The loonie, which has been the top performing G10 currency
since the start of the year, touched its weakest intraday since
Tuesday at 1.3242. For the week, the loonie was on track to rise
0.4 percent.
    Gains for the loonie came a day after Bank of Canada
Governor Stephen Poloz reiterated that interest rates needed to
move up into a neutral range over time, but that the path back
was now "highly uncertain" due to global trade disputes and high
household debt loads.             
    Canada's once-roaring housing market has been tamed,
according to the latest Reuters poll of analysts who predict
house prices will rise nationally and that in key urban hot
spots they will not outstrip overall inflation over the next two
    Canadian government bond prices were higher across a flatter
yield curve in sympathy with U.S. Treasuries. The two-year
           rose 3 Canadian cents to yield 1.779 percent and the
10-year             climbed 28 Canadian cents to yield 1.891

 (Reporting by Fergal Smith; editing by Jonathan Oatis)