CANADA FX DEBT-Canadian dollar rises as selloff in U.S. bonds ebbs

    (Adds strategist quote and details throughout; updates prices)
    * Canadian dollar strengthens 0.3% against the greenback
    * Loonie trades in a range of 1.2454 to 1.2516
    * Price of U.S. oil settles 0.1% lower
    * Canadian bond yields trade mixed across a flatter curve

    By Fergal Smith
    TORONTO, Jan 20 (Reuters) - The Canadian dollar strengthened
against the greenback on Thursday as U.S. bond yields stabilized
and Ontario, Canada's most populous province, said it would soon
ease restrictions to curb the spread of the Omicron coronavirus
variant.
    The loonie        was trading 0.3% higher at 1.2472 to the
greenback, or 80.18 U.S. cents, after trading in a range of
1.2454 to 1.2516.
    Among G10 currencies, only the Australian dollar
notched a bigger gain. Both Canada and Australia are major
producers of commodities.
    "Interest rate differentials are tilting against the
(U.S.)dollar, lifting the appeal of currencies leveraged to
rest-of-world growth," said Karl Schamotta, chief market
strategist at Corpay.
    U.S. Treasury yields have pulled back from 2-year highs as
data showed that the number of Americans filing new claims for
unemployment benefits unexpectedly rose last week.
    Ontario has blunted transmission of the Omicron variant and
it will gradually ease restrictions on businesses from
end-January, Premier Doug Ford said.
    Despite the prospect of slower economic growth due to
restrictions, investors have raised bets that the Bank of Canada
will hike interest rates on Jan. 26. It would be the first hike
since October 2018.
    Data from payroll services provider ADP showed that Canada
added 19,200 jobs in December, the fifth straight month of gains

    Canadian retail sales data, due on Friday, could offer more
clues on the strength of the domestic economy.
    The price of oil       , one of Canada's major exports,
settled 0.1% lower at $86.90 a barrel as U.S. crude inventories
rose for the first time in eight weeks and investors took
profits after a recent rally.
    Canadian government bond yields were mixed across a flatter
curve. The 10-year             eased 2.4 basis points to 1.857%,
after touching on Wednesday its highest intraday level since
March 2019 at 1.905%.

 (Reporting by Fergal Smith; Editing by Jonathan Oatis and
Sandra Maler)

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