* Canadian dollar rises 0.2% against the greenback * Loonie touches a one-week low intraday at 1.3346 * Price of U.S. oil increases nearly 1% * Canadian bond prices fall across a steeper yield curve TORONTO, Oct 10 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Thursday, recovering from an earlier one-week low, as investors hoped for progress in trade talks between the United States and China. The U.S. dollar was on track for its biggest daily drop in five weeks against its rivals as the prospects of a partial U.S.-China trade deal fueled appetite for trade-oriented currencies. High-level negotiators from the two countries were due to meet on Thursday for the first time since late July. Canada is more dependent on trade than some other countries, such as the United States. At C$1.5 trillion, trade of goods and services, including exports of oil, accounted for 66% of Canada's economy in 2018, according to government data. U.S. crude oil futures were up nearly 1% at $53.1 a barrel At 8:56 a.m. (1256 GMT), the Canadian dollar was trading 0.2% higher at 1.3316 to the greenback, or 75.10 U.S. cents. The currency touched its weakest intraday level since last Thursday at 1.3346. The gain for the loonie came as data from Statistics Canada showed that new home prices rose 0.1% in August, the first increase since July 2018. Canada's employment report for September is due on Friday, which can help guide expectations for the Bank of Canada policy outlook. Robust job gains this year have supported the central bank's decision to leave its benchmark interest rate on hold at 1.75% this year even as some of its peers, including the U.S. Federal Reserve and the European Central Bank, have reduced borrowing costs. Canadian government bond prices were lower across a steeper yield curve after U.S. data showed that consumer prices were unchanged in September. The two-year price fell 1 Canadian cent to yield 1.48% and the 10-year was down 19 Canadian cents to yield 1.331%. (Reporting by Fergal Smith Editing by Nick Zieminski)
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