* 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 expected. 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 barrel. 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 years. 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 percent. (Reporting by Fergal Smith; editing by Jonathan Oatis)
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