CANADA FX DEBT-Loonie holds near December high after U.S.-China trade deal

 (Adds strategist quotes and details; updates prices)
    * Canadian dollar weakens 0.1% against the greenback
    * Loonie trades in a range of 1.3163 to 1.3194
    * Price of U.S. oil rises 0.7%
    * Canadian bond prices fall across a steeper yield curve

    By Fergal Smith
    TORONTO, Dec 12 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Thursday but held onto most of
the previous day's gains as investors cheered news of a
U.S.-China trade deal and after the Bank of Canada was
untroubled by November's jobs decline.
    The U.S. dollar        rallied against a basket of major
currencies and Wall Street's main indexes hit record highs
following news that the United States had reached a "deal in
principle" with China to resolve a trade war that has rattled
markets for nearly two years.             
    Canada is a major exporter of commodities, including oil, so
its economy could benefit from reduced global trade uncertainty.
U.S. crude oil futures        settled 0.7% higher at $59.18 a
    "Positive trade news is going to be positive for the
Canadian dollar," said Andrew Sierocinski, foreign exchange
analyst at Klarity FX.    
    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, Bank of Canada Governor
Stephen Poloz said.             
    Poloz is sending the message that the economic outlook is
looking better than at the bank's monetary policy report in
October, Sierocinski said, though he said that message may be
too optimistic.
    At 4:32 p.m. (2132 GMT), the Canadian dollar          was
trading 0.1% lower at 1.3184 to the greenback, or 75.85 U.S.
cents. The currency traded in a range of 1.3163 to 1.3194,
within reach of its December peak at 1.3158.
    On Wednesday, the loonie rallied 0.5% after the U.S. Federal
Reserve's benign inflation outlook reduced expectations for a
rate hike any time soon.             
    Canadian government bond prices were lower across a steeper
yield curve in sympathy with U.S. Treasuries. The two-year
           fell 7 Canadian cents to yield 1.701% and the 10-year
            was down 80 Canadian cents to yield 1.671%.
    The 10-year yield touched its highest intraday level since
May 23 at 1.682%.

 (Reporting by Fergal Smith; editing by Jonathan Oatis and
Leslie Adler)