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CANADA FX DEBT-Canadian dollar gains as trade deal optimism boosts stocks

By Fergal Smith

(Adds strategist quotes and details throughout; updates prices) * Canadian dollar rises 0.2% against the greenback * CN Rail and union reach deal to end strike * Loonie trades in a range of 1.3273 to 1.3316 * Canadian bond prices rise across a flatter yield curve By Fergal Smith TORONTO, Nov 26 (Reuters) - The Canadian dollar strengthened against the greenback on Tuesday, paring its decline since October as optimism rose on U.S.-China trade talks and after a deal was reached to end a railway strike that threatened to slow Canada's economic growth. U.S. stocks rose to a record high after President Donald Trump said the United States and China were close to an agreement on the first phase of a deal. "Equity markets are still pretty happy, so there is no reason to sell Canada further at this point," said Michael Goshko, corporate risk manager at Western Union Business Solutions. Canada runs a current account deficit and is a major exporter of commodities, including oil, so its economy could benefit from an improved outlook for the global flow of capital or trade. U.S. crude oil futures rose 0.6% to $58.35 a barrel. At 4:01 p.m. (2101 GMT), the Canadian dollar was trading 0.2% higher at 1.3274 to the greenback, or 75.34 U.S. cents. The currency traded in a range of 1.3273 to 1.3316. The loonie has been pressured since October by a more dovish stance from the Bank of Canada. Last Wednesday, it hit its weakest intraday level since Oct. 10 at 1.3328. "We are seeing a little bit of position squaring" by investors after major trendline support for the loonie held around 1.3330, Goshko said. Canada's longest railroad strike in a decade ended as Canadian National Railway Co , the country's biggest railroad, reached a tentative agreement with workers. But shippers warned it could take weeks before service bounces back to normal. Economists estimated that a prolonged strike could have cost the Canadian economy billions of dollars. Data for Canada's third-quarter gross domestic product is due on Friday. 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 1.567% and the 10-year was up 23 Canadian cents to yield 1.437%. (Reporting by Fergal Smith; Editing by Nick Zieminski and Peter Cooney)