* Canadian dollar falls 0.2 percent against the greenback
* Price of U.S. oil rises 0.8 percent
* Canadian bond prices decline across a flatter yield curve
* Gap between 2- and 10-year yields hits narrowest in 11 years
TORONTO, Oct 25 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Thursday as the boost it got from a Bank of Canada interest rate hike on the previous day was unwound.
At 10:15 a.m. (1415 GMT), the Canadian dollar CAD=D4 was trading 0.2 percent lower at 1.3087 to the greenback, or 76.41 U.S. cents. The currency traded in a range of 1.3015 to 1.3096.
On Wednesday, the loonie touched its strongest intraday level in one-week at 1.2969 after the Bank of Canada raised interest rates and said it might speed up the pace of future hikes given that the economy was running at almost full capacity and did not need any stimulus. markets expect the central bank to hike again by January. BOCWATCH
The price of oil, one of Canada's major exports, bounced back from an early sell-off after Asian and European stock markets plunged in the wake of Wall Street's biggest daily decline since 2011. crude CLc1 prices rose 0.8 percent to $67.35 a barrel, while U.S. stocks were boosted by strong quarterly results reports from Comcast Corp (NASDAQ:CMCSA), Microsoft Corp (NASDAQ:MSFT) and electric carmaker Tesla Inc. average weekly earnings of nonfarm payroll employees rose 2.9 percent year-over-year in August, while the number of nonfarm payroll employees was up 24,600 in August from July, according to data released on Thursday https://www150.statcan.gc.ca/n1/daily-quotidien/181025/dq181025a-eng.htm.
Canadian government bond prices were lower across a flatter yield curve, with the two-year CA2YT=RR down 2 Canadian cents to yield 2.317 percent and the 10-year CA10YT=RR declining 5 Canadian cents to yield 2.448 percent.
The gap between the two-year and 10-year yields narrowed by 0.5 basis points to a spread of 13.1 basis points, its smallest since October 2007.