* Canadian dollar strengthens 0.5% against the greenback
* Canada's economy grows by 0.7% in November
* Price of U.S. oil rises nearly 1%
* Canadian bond yields rise across a steeper curve
TORONTO, Jan 29 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Friday as oil prices rose and data showed the domestic economy growing faster than expected in November, with the loonie clawing back some of this week's decline.
The Canadian economy grew by 0.7% in November, surpassing estimates for a 0.4% gain, data from Statistics Canada showed. A preliminary estimate pointed to a 0.3% advance for December GDP, while fourth-quarter annualized growth was seen at 7.8%. week, the Bank of Canada projected fourth-quarter growth of 4.8%. The unprecedented liquidity injected into the financial system from the BoC's bond purchases has pushed some money market rates below the central bank's targeted interest rate, and analysts say the pressure will persist until the quantitative easing program is scaled back. price of oil, one of Canada's major exports, rose as a cut in Saudi Arabian oil supply and falling U.S. oil inventories offset concerns caused by new coronavirus variants and slow vaccine rollouts. crude oil futures CLc1 rose nearly 1% to $52.85 a barrel, while the Canadian dollar CAD= was trading 0.5% higher at 1.2759 to the greenback, or 78.38 U.S. cents. The currency traded in a range of 1.2754 to 1.2874.
For the week, the loonie was on track to slip 0.2%, after a volatile few days on Wall Street. Global shares .WORLD fell on Friday as a Wall Street battle between hedge funds and retail investors and a row in Europe over COVID-19 vaccine supply cooled risk appetite. government bond yields were higher across a steeper curve in sympathy with U.S. Treasuries, with the 10-year CA10YT=RR up 4 basis points at 0.914%.